Stocks Projecting ‘sharp sell-off in Nov ‘21’ after Nov Spike High. Then What?
10/29/21 INSIIDE Track – “Not only is 1Q ‘22 (most synergistic in Jan/Feb ‘22 and ideally in Jan ‘22) the convergence of a web of 16, 8 & 4-month cycles, it is also the latest phase of the most consistent cycle of this century – the 3.25-Year Cycle. That cycle was last involved in creating the Dec. ’18 low and projecting an overall advance into 1Q ’22 – when the next phase should invert and time a 1 – 2 year (or longer) peak.
That would fulfill a 3.25-year low (1Q ‘09) – low (2Q ‘12) – low (3Q ‘15) – low (4Q ‘18) – high (1Q 2022) Cycle Progression.
And that would also dovetail with the 2-Year Cycle that was detailed extensively in 2018 and again in 2020. Both times, it created peaks in Jan/Feb of those respective years – as well as subsequent peaks in Sept/Oct ‘18 & ‘20 – and is on track to create a similar peak in Jan/Feb ‘22.
So, there is quite a bit of synergy coming into play in 2022 as equities remain above multi-month and intra-year support levels during recent corrections. That does not, however, preclude the potential for another sharp sell-off in Nov ‘21 (potentially stretching into the first half of Dec. ‘21).
The NQ-100 bottomed above support (~14,100) and has since rallied back to the highs – signaling a wave ‘5’ of its own (though on a different magnitude than that of the Russell 2000) – stemming from the Mar ‘21 low. That is why the Oct. rally was stronger than expected. Since initially peaking in Feb. ’21, the NQ-100 has had three successive corrections – each one bottoming right at the rising weekly 21 Low MAC.
The second and third ones represent the ‘2’ and ‘4’ wave corrections in the 5-wave sequence that has unfolded since the early-Mar ‘21 low. The weekly trend shows that this latest rally does not have the same underlying strength as its predecessors – another earmark of a wave ‘5’ rally. As a result, it might not spike too much higher than the early-Sept high.
3 – 6 month & 6 – 12 month (and even 1 – 2 year) traders and investors should have been lightening up on long positions in early-Sept.”
Stocks continue to trace out a lengthy topping process that began with weaker equities and indexes peaking in May/June ’21 – the time for (at least) a 3 – 6 month peak. Other (stronger) stocks and indexes – like the S+P 500 and Nasdaq 100 – were/are projected to set a sequence of intermediate highs in May/June, early-Sept and now early-Nov ’21.
The wave structure in the NQ-100 is corroborating this, projecting a wave ‘5’ spike high in the coming weeks followed by ‘another sharp sell-off in Nov ’21… stretching into the first half of Dec ‘21’.
That would be even more likely if indexes like the DJTA and Russell 2000 – which are projecting new highs in the coming weeks (the 5th of 5th wave culmination; an overall wave structure stemming from the March ’20 lows) – are able to reach upside price targets and fulfill the criteria for wave ‘5’ peaks. Continued divergence is expected, so individual stocks and indexes need to be examined independently – both during the time for this next early-Nov – early-Dec correction AND for the subsequent time frame from early-Dec ’21 into 1Q ’22.
Where are the various indexes most likely to peak – in early-Nov and/or in 1Q ‘22?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.