Stocks Peaking; Nasdaq 100 Poised for Wave ‘5’ Rally to ~16,700/NQ.
11/17/21 Weekly Re-Lay Alert – “Stock Indices continue to correct after surging to new highs and fulfilling the potential for peaks on Nov. 4 – 9 perpetuating a ~60-day/~2-month low-high-high-high-(high) Cycle Progression in which a low and then a series of peaks were seen on the 4th – 7th trading day of every other month (March, May, July, Sept. and Nov ‘21)…
It is important to continually view this in the proper context and outlook for 2021/2022. Most stock indexes were/are expected to set 1 – 3 month (or longer) tops in May/June ’21, Sept. ’21 and Jan/Feb ’22. The first two of those multi-month cycle highs have been fulfilled with the third one on track to time another intermediate peak.
Their intervening action has been – and is likely to remain – diverse as many stocks remain below their May/June ’21 peaks while others quickly exceeded those highs on their way to higher peaks in Sept. and then in early-Nov ’21 (and likely to higher highs in Jan ’22 – when a larger-magnitude peak is expected).
In many cases, the DJTA has led key turning points including the peak in May ’21 and now a recent peak in early-Nov. (the ~2-month midpoint between the early-Sept ’21 peak and the next phase of a ~4-month cycle in early-Jan ’22). Based on the action leading into the recent peak, that index is unlikely to set new intraday highs for some time…
The magnitude of the DJTA’s advance – from Sept 20 into Nov. 2 – matched the magnitude of its initial March – June ’20 rally, a potential case of wave ‘5’ = wave ‘1’. Since that wave structure also included an extended wave ‘3’, the wave similarity of the wave ‘1’ and ‘5’ argues for a significant peak. So, once again, the DJTA could have peaked first… with other stocks and indexes on track to peak (divergently) in Jan. ’22.”
Stocks are fulfilling critical upside targets with the NQ-100 still capable of spiking up toward ~16,700/NQZ – ‘where a myriad of upside objectives converge’ before a peak is intact.
The Russell 2000 fulfilled its monthly & weekly trend patterns as well as Elliott Wave structure – all of which projected a final surge following the Sept 20 cycle low. It has reached key upside targets and could now see a larger-magnitude sell-off.
The DJTA has done the same – and has reached multiple major upside price targets – setting the stage for a multi-month (or longer) peak. Continued divergence is expected as the equity markets prepare for what could be a dramatic shift in 2022.
What are ramifications of DJTA, Russell 2000 and NQ-100 attacking multi-month or multi-year upside targets? What does this mean for next sell-off??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.