Stocks Projecting Surge into Nov ’22; Trigger New Buy Signals!
10/19/22 Weekly Re-Lay Alert – “Stock Indices are steadily advancing after creating a violent spike low on Oct 13 – in sync with the release of the Sept ’22 CPI and in fulfillment of the Oct 12 Weekly Re-Lay Alert analysis for a 30 – 60 minute spike low and reversal higher.
They still need to do more work to signal a larger-magnitude bottom. That ‘work’ has begun to occur with the DJIA turning its daily trend up. The S+P 500 and NQ-100 need daily closes above 3733/ESZ & 11,253/ NQZ to do the same.
(The Russell 2000, S+P Midcap 400 & DJTA did not turn their daily trends down, during the drop into Oct 13, and have since re-entered their daily uptrends – corroborating the potential for a multi-week rally.)
At the same time, the DJIA and DJTA closed above their declining daily 21 High MACs. When an intermediate reversal higher is unfolding, that signal is usually followed – within 1 – 2 trading days – by the direction of the daily 21 High MAC turning up.
For that to occur, the DJIA needs to rally above (intraday) 31,020/DJIA tomorrow… but only above 30,302/DJIA on Oct 21. (Other indexes would need to rally above their Sept 21 highs on Oct 20, above their Sept 22 highs on Oct 21, etc. to turn their respective daily 21 High MACs up.)
The DJTA also closed above its daily 21 High MAC while turning its intra-month trend up… and then pulled back to its flattening 21 High MAC. If it can rally above 13,010/DJTA tomorrow, it would turn the direction of that average up.
This comes after many stock indexes just 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, likely stretching into Nov ‘22.
In a moderate scenario, the DJIA could rally about the same magnitude as it did in late-Feb – mid-April ’22… taking it back up to ~32,000/DJIA. That is also right where the monthly 21 Low MAC comes into play and where the descending weekly 21 High MAC will be in late-Oct and possibly early-Nov. It is where the DJIA would rebound .618 of its latest decline and is where the latest two weekly LHRs converge.
(The DJTA has seen two successive rebounds of ~2,500 points. A third, ~2,500 point rally would take it back up to ~14,500/DJTA IF the current lows hold.)
There is another intermediate cycle that is prevalent in some of the indexes and which could help mold expectations for the coming months. It has been a ~19-week (NQ-100) – ~20-week (Russell 2000) high-high-high Cycle Progression – connecting the highs of Nov ’21, Mar ’22 & Aug ’22.
The next phase is in early-Jan ’23 and could time a subsequent peak if recent lows hold.
For now, the short-term trends are turning positive in several indexes and corroborating indicators (daily 21 MAC, daily trends in SP & NQ, etc.) could add to that in the next 1 – 2 days. If so, it would show that a multi-week low is likely intact (for some indexes that have held their mid-June ’22 lows, it stretches out that multi-month low into a multi-quarter low) and that an initial rally into Nov ’22 is underway.
1 – 2 month traders can enter long positions in stock indexes between current levels and the Oct 13 lows and risk (exit on) a daily close below the Oct 13 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 could lead to a multi-week or multi-month rally. Many other cycles & indicators concur. New buy signals corroborate!
On a broader basis, stocks are reinforcing longer-term analysis for a 1 – 2 year peak in early-Jan ’22 followed by a 6 – 12 month plunge in 2022. See related publications for additional analysis.
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.