Stocks Project Largest Advance of 2022; 34,200/DJIA Possible!
10/22/22 Weekly Re-Lay – “Stock indices created a divergent low with the more resilient indexes holding their mid-June lows while many others spiked to new intra-year lows. Coinciding with a spike low & reversal higher on the Oct 13 CPI report, stocks have since rallied and could see their largest advances in 2022 in the coming weeks…
Stock Indices are steadily advancing with the DJIA joining the Russell 2000 & S+P Midcap 400 in leading this bullish reversal and providing a steady stream of positive signals. A key one was the Oct 14 weekly 2 Close Reversal buy signal – projecting 2 – 3 weeks of subsequent upside as the first surge.
On the Oct 21 weekly close, the DJIA reinforced that signal – as well as the 1 – 3 month buy signals triggered on Oct 20 – by neutralizing its weekly downtrend while closing above its declining weekly 21 Low MAC. While those are not ‘wildly bullish’ signals (yet), they are powerful validation to all of the other bottoming signals that have been generated since Oct 12/13.
At the same time, the S+P 500 & NQ-100 turned their daily trends up, reinforcing the likelihood that a multi-week and possibly multi-month low is intact. Corroborating that, the DJIA completed a bullish daily 21 MAC reversal signal – first closing above its declining daily 21 High MAC and then turning the direction of that 21 MAC up within 1 – 2 trading days.
The S+P 500, Nasdaq-100 & Russell 2000 futures all triggered the third consecutive daily 2 Close Reversals higher – a rare 3-Step Reversal higher – with Friday’s outside-day/2 Close Reversals higher.
This comes after many stock indexes perpetuated a ~16-week high (early-Nov ’21)-low-low-low-(low; late-Sept/early-Oct ’22) Cycle Progression that should prompt a 2 – 4 week – and possibly longer – rebound, expected to stretch into (at least) Nov ‘22.
At the very least, the DJIA is looking likely to rally to ~32,000/DJIA – matching the magnitude of its late-Feb – mid-April ’22 rally. That is also where the monthly 21 Low MAC converges with the declining weekly 21 High MAC in the coming week(s). It is where the DJIA would rebound .618 of its latest decline and where the two of the latest three weekly LHRs converge (32,001 – 32,193/DJIA).
If stock indices manage to turn their weekly trends up in November, they could extend this rebound into Dec ’22 and potentially attack their mid-Aug ’22 highs (4th waves of lesser degree described in Oct ’22 INSIIDE Track) – with multiple levels of key resistance hovering around 34,200 – 34,600/DJIA.
1 – 2 month traders could have entered long positions in stock indexes from the Oct 19 close to the Oct 21 lows and now risk (exit on) a daily close below the Oct 21 lows.” TRADING INVOLVES SUBSTANTIAL RISK!
Stock indexes sold off into the recurrence of an uncanny ~15-Week Cycle that projects a 1 – 2 month bottom by/on Sept 30, reinforced by several indexes dropping to new 2022 lows. More importantly, they have fulfilled 9 – 12 month downside wave structures and project a higher-magnitude rally in the coming month(s). A bottoming phase should now begin to unfold… and could lead to a 15 – 20% DJIA gain in 4Q ’22 (see Oct ’22 INSIIDE Track for details).
A final, potentially violent spike low on the Oct 13 CPI Report was expected, and fulfilled, and is projected lead to the largest advance in 2022. Many other cycles & indicators concur. New buy signals corroborate!
How Would Late-Sept ’22 Low Reinforce Overall 2022/2023 Outlook?
Why is Higher-Magnitude Rally Expected in 4Q ‘22??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.