Stocks Projecting Surge to ~34,200/DJIA in Coming Weeks/Months!
10/21/22 INSIIDE Track Update – “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 (likely) 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.
On a daily basis, the DJIA also completed a 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 today’s outside-day/2 Close Reversals higher… as the ESZ & NQZ turned their daily trends up.
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.
This action powerfully validates the outlook for a decisive low in line with the wave structure in most indices… needing only to see a final spike low by mid-Oct (that would remain near the existing lows) to fulfill the final criteria for a multi-month bottom. As stated in the Oct ’22 INSIIDE Track:
9-30-22 – “For multiple reasons, a low at this time – and near current levels – could usher in a longer-lasting consolidation phase before the next decline. That is reinforced by the overall wave structure in most indexes – that are now fulfilling a type of wave ‘5’ declines. However, a bottom must take hold near current levels for that to be the case!
That means that a subsequent ‘a-b-c’ rebound (a rally that is one degree higher in magnitude than the mid-June – mid-Aug ’22 rallies) could unfold and ultimately take many indexes back to their mid-Aug ’22 highs – levels that represent the wave ‘4’ rebound peak on the way down. They are now viewed as the ‘4th wave of lesser degree’ resistance and/or upside targets ONCE a low has been confirmed…
In 2022, the DJIA peaked in early-Jan and sold off for ~8 months (as the NQ-100 sold off for ~7 months from its Nov ‘21 peaks) and is becoming more likely to rebound into a lower high… The coming weeks, however, represent a very dangerous time when stocks could still spike lower.”
Stock indices have, and continue to, fulfill this outlook with uncanny accuracy. The action since Oct 13 – when a final spike low was forecast to usher in a decisive bottom – has corroborated what was described in the Oct 14, ’22 INSIIDE Track Stock Index Update:
10-14-22 – “On a weekly & monthly basis, some key Stock Indices continue to hold their mid-June lows in what has become 3 – 6 month bottoms. On a trend and indicator basis, most stocks and stock indices spiked below their mid-June lows, fulfilling the weekly trend and intra-year trend sell signals of mid-Aug… and subsequent cycle downturn in mid-Sept…
They continue to attack major 3 – 6 and 6 – 12-month support & downside targets at 3560 – 3610/SPX and 10,700 – 11,100/NQ, maintaining the potential for a more substantial rebound following the recent drops to new lows…
There are a few other factors arguing for a more substantial rebound from the recent (or imminent) lows. First is the action of the monthly 21 MACs. This has been a textbook progression of this indicator – and related price movement – since the Nov ‘21/Jan ’22 peaks… that trend reversal confirmation – like some others – often times an intervening low and allows for a rally back to the now-descending monthly 21 Low MACs… before a sharper sell-off…
Second is the trio of weekly cycles that are governing the DJIA & other indices. The larger of these is the 33 – 35-week/~8-month high-high-high-(high) Cycle Progression that helped time the mid-Aug ‘22 peak…
At the same time, however, the Russell 2000, S+P Midcap 400 & DJTA have been forming a closely related cycle between the lows (32 – 33 weeks in duration) and a ~16-week mid-cycle. The recent lows 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.”
Even if this is just a moderate rebound, 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 the coming week It is where the DJIA would rebound .618 of its latest decline and is where the two of the latest three weekly LHRs converge (32,001 – 32,193/DJIA).
However, if the recent lows are going to hold for more than a month, this overall rebound should exceed those levels (even if that does not occur until a second rally unfolds). That could take the DJIA and some other indexes back toward their mid-Aug ’22 highs – with multiple levels of key resistance hovering around 34,200 – 34,600/DJIA… and could stretch this rebound into the first half of Dec ’22. The price action of the next 2 – 4 weeks needs to clarify this with the weekly trends being a critical filter.
This leads into a refresher on another topic. Mid-term election stock market cycles are worth examining for a minute, since there appears to be a 12-Year Cycle (the closest possible election cycle to the ~11.2-Year Sunspot Cycle that has been cited many times with regard to expectations for 2020 – 2025) with regard to many of the larger 4th quarter stock market gains overlapping mid-term elections. 2022 is the latest…
1962 – ~12% gain
1974 – ~14% gain (before dropping back to low)
1986 – ~11% gain
1998 – ~20% gain
2010 – 8 – 10% gain
2022 – ???% gain
An ~11% gain would take the DJIA back to ~32,000 – its primary upside target. A ~20% gain – only seen in 1998 (though the 1974 rally in Oct/Nov did advance 20% from the Oct ’74 low before peaking) – would take the DJIA back to ~34,400/DJIA… its more bullish upside target.
1 – 2 month traders could have entered long positions in stock indexes at today’s lows and should now risk (exit on) a daily close below today’s (Oct 21) low.” TRADING INVOLVES SUBSTANTIAL RISK!
Stock indexes are holding late-Sept/early-Oct lows and projecting the largest advance in 2022 – capable of reaching 34,200 – 34,600/DJIA (see Oct ’22 INSIIDE Track for details). They have fulfilled 9 – 12 month downside wave structures and project a higher-magnitude rally in the coming month(s). Many other cycles & indicators concur. Oct 13 & 20 buy signals corroborate!
How Would Late-Sept ’22 Low Reinforce Overall 2022/2023 Outlook?
Why is Higher-Magnitude Rally Very Likely in 4Q ‘22??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.