Stocks Reinforce Mid-Aug Cycle Highs; Weekly Trends Project New Lows.
09/03/22 Weekly Re-Lay – “Stock indices have sold off after fulfilling cycles and long trading signals on Aug 15/16. That peak was set as the DJIA reached its final upside target for the mid-July buy signals and as the DJIA, S+P 500, NQ-100, Russell 2000 and S+P Midcap 400 attacked monthly resistance…
Stock Indices have sold off after surging from July 14 into Aug 16, fulfilling the 1 – 4 week and 1 – 2 month buy signals triggered on July 14, perpetuating a ~1-month low-low-low-low-(high) Cycle Progression and fulfilling the outlook for ‘the largest rally of 2022’. The most important question is whether that fulfilled all of their rebound potential.
Most indices fulfilled their intra-month uptrends and the upside potential for August by peaking at monthly resistance/SPRs (34,228/DJIA, 4309/ESU, 13,787/NQU, 2014/QRU & 2640/IDX). Some, like the DJIA, reached 2 – 3 month upside targets (34,200/DJIA) that could mark a 3Q ’22 peak. Others could see add’l spike highs before a peak.
The DJTA fulfilled a 20-week high-high-(high) Cycle Progression (Aug 15 – 19 high) while completing successive advances of exact duration (33 days each) as the S+P Midcap 400 peaked within days of a ~21-week low-high-low-high-high-high-(high) Cycle Sequence while fulfilling an over-arching 41 – 43-week low-low-low-high-(high) Cycle Progression.
It did that after rebounding a full .618 of the Nov ’21 – June ’22 decline… but without turning the weekly trend up. All of those signals argue for a multi-month peak (mid-Aug)…
Stock Indexes sold off into month-end, fulfilling Intra-Month Inverted V Reversals lower. That pattern usually spurs (at least) some follow-through selling into the opening days of the following month. An 80 – 84-day high-low-(low) Cycle Progression (~11/ 12 week) projects a low for Sept 6 – 9.”
Stock indexes completed the July 14 buy signals on Aug 16 while attacking primary upside objectives and completing what had been forecast to be ‘the largest rally of 2022’. If a subsequent, divergent high is set on Sept 12 – 16, it would usher in a bearish phase for stocks in the second half of September ’22. Volatile consolidation is likely until mid-Sept. with an intervening low likely on Sept 6 – 9.
The DJIA reached its multi-month upside target (~34,200) in mid-Aug, signaling a likely multi-month peak, as the DJTA & S+P Midcap 400 fulfilled decisive cycle highs and related upside objectives that likely created multi-month peaks. Most indexes failed to turn their weekly trends up, signaling multi-month tops and projecting declines back to their mid-June lows in the ensuing month(s). A few stocks could set higher highs on Sept 12 – 16 while most are likely to set lower highs and then enter a new bearish phase.
On a broader basis, stocks powerfully fulfilled projections for a decisive peak in early-Jan ’22 followed by a multi-month plunge in the first half of 2022. They then fulfilled projections for the largest rally of 2022, triggering 2 – 4 week buy signals on July 14 and fulfilling those signals on Aug 16. Consolidation is expected until Sept 12 – 16 ’22, when cycles again turn negative.
How Does Mid-Aug ’22 Cycle Peak Fit with Overall 2022/2023 Outlook?
Why Does DJIA, DJTA, Russell 2000 & S+P Midcap 400 Action Portend New Decline??
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.