Stocks Preparing for Feb/March Sell-offs with IDX Leading Way Lower.
02/06/25 – “Stock indices began the week with another abrupt sell-off on the heels of short-lived (for now) tariffs on Canada & Mexico. Several indexes spiked down to weekly support levels on Monday, reinforcing the likelihood for a 3 – 5 day low. As in the prior week (that began with a similar plunge), a quick recovery ensued.
Equities remain in the midst of a multi-week congestion period, having fulfilled expectations for a 1 – 3 week reactive rally linked to their weekly trend patterns & 4-Shadow signals triggered on January 10/13th. That led to rallies to monthly resistance levels, and corresponding upside targets, with many indexes peaking by/on January 24th.
The S+P Midcap – which has been leading most reversals since early-October – was projecting a rebound peak on January 22/23rd that would fulfill a 58 – 59 day high (June 3) – high (July 31) – high (Sept 27) – high (Nov 25) – (high; Jan 22/23) Cycle Progression. It topped on January 22nd.
A peak on January 22nd – the ideal scenario – was forecast to ‘likely trigger a decline into the middle half of February ’25’. That is slowly unfolding… but needs additional confirmation quickly.
The Transports (DJTA) spiked up to their weekly 21 High MAC while rebounding 50% and attacking a multi-week range-trading target and then plunged, triggering an outside-week/2 Close Reversal lower… reinforcing the likelihood for a new sell-off into Feb 10 – 21, ‘25 (see previous publications for details)…
A DJTA low in Feb ’25 would perpetuate an ~8-month high (Feb ’23) – low (Oct ’23) – low (June ’24) – (low; Feb ’25) Cycle Progression. [The ~8-month & ~16-month cycles are some of the most common in a majority of markets.]
From a price perspective, the DJTA is concentrating a multitude of intermediate support – and trend breakdown levels – at 15,670 – 15,770/DJTA. That is where the DJTA bottomed in December and where it spiked back down to on February 3rd. It is also where the weekly 40 Low MAC is currently and where the weekly 21 Low MARC will be next week (Feb 10 – 14th).
As a result, a drop below ~15,700/DJTA next week would magnify its impact (in a negative way)… as would a daily & weekly close below that support.
Since that range also includes the monthly trend indicator, a monthly close below it would have even greater impact. That level is also monthly support for February, reinforcing its significance over the next 1 – 2 weeks.
It would not be surprising to see stock indexes experience another abrupt sell-off on February 7/10th – the third week in a row that intra-week pattern could unfold.
Part of that is due to a series of daily Cycle Progressions in the NQ-100 that could time a new 1 – 2 week low on February 10th – fulfilling a 28-day high-low-(low) & related 14-day low-low-(low) Cycle Progression. That would also fulfill a 50% retracement (in time) of its Sept – Dec ’25 rally.
On a near-term basis, the key is now the new intra-month trends. It would take daily closes below the February 3 – 5th trading ranges – in each of the stock indexes – to turn their new intra-month trends down and project a new round of selling. (The S+P 500 & NQ-100 have initially turned their intra-month trends up, contrasting these other indicators.)
On an intermediate basis, stock indexes need to give weekly closes below their mid-January lows to exit the intervening trading range and elevate their sell-offs to a higher magnitude. Until that occurs, they remain in multi-month congestion ranges – with some indexes weaker and some stronger than others – looking for new direction.
This overall correction is still capable of stretching into March/April ‘25 – the convergence of multiple cycles & Cycle Progressions including an 18/19-month low-low-(??) Cycle Progression, a 2-Year Cycle (DJIA peaked in late-Nov ’22 and sold off into March ’23) and an annual cycle that timed intra-year lows in 2020, 2023 & 2024.” TRADING INVOLVES SUBSTANTIAL RISK
Stock Indexes are adding corroboration to major peaks projected for late-Nov ’24 – set on November 22/25th while fulfilling repeatedly-published cycles and major upside price targets. That ushered in what was projected to be 3 – 6 month (or longer-lasting) peaks in late-Nov. ’24… and to ultimately lead to major 2025 plunges as part of a major setback in equity markets.
Subsequent highs – particularly in the S+P Midcap 400 – were projected for ~January 22nd and expected to prepare the way for sharper declines in Feb/March ’25, including a likely March Meltdown and confirmation of a broader stock market (seismic) shift. That is in sync with weekly trend and multi-month 4-Shadow signals triggered on January 10/13th that projected a 2 – 3 week reactive bounce before a much larger stock plunge takes hold. Many indexes peaked precisely on January 22nd!
The 17-Year Cycle projected 4Q 2024 as the most likely time for a major peak in equities – and 2025 as the time for the next major decline. In line with that, the DJIA is already revealing eerie parallels to late-2007/early-2008 and providing a roadmap for future expectations. Cycles and timing indicators are already identifying the next likely time frame when a future sharp sell-off is likely… in (see publications for details).
Do January 22/23rd (Divergent) Highs Reinforce Outlook for ‘March Meltdown’?
How Does Late-Jan/Early-Feb Peak Reinforce 1Q ‘25 Bearish Outlook?
What Do Weekly Trend & 4-Shadow Signals Bode for February/March ‘25?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.