Stocks Reinforce Monthly Cycle Lows; S+P Projects (Ultimate) Surge Above 4300/ES.
01/25/23 Weekly Re-Lay Alert – Stock Indexes continue to reinforce congestion while remaining positive on a near-term basis. After rallying for a couple weeks, from intermediate cycle lows in late-Dec/early-Jan, stocks had a sharp pullback into Jan 20 that was not able to turn their daily trends down.
Today’s spike lows – in most indexes – tested and held daily HLS levels and then closed above their daily trend points. On a short-term basis, that projects a rally back to or above the Jan 13 – 18 highs. That is not, however, expected to trigger any upside breakouts… just a slight expansion of the latest trading range.
It still appears likely that stocks will [reserved for subscribers]…
That 16 – 17-week cycle dates back to the early-Nov ’21 high – when three major indexes (and a myriad of stocks) fulfilled upside objectives for ‘5th of 5th of 5th’ wave peaks – and has timed many of the most decisive turning points since then.
Those weekly cycles are corroborated by a unique development in stock index monthly cycles. In 2018 – 2022, stocks adhered rather closely to a series of ~4-month, ~8-month & ~16-month cycles between their highs. The early-Jan ’22 fulfilled the final phase in an ~8-month high-high-high-(high) Cycle Progression (Jan ’20 – early-Sept ’20 – early-May ’21 – early-Jan ’22 highs) and projected the onset of a 1 – 2 year decline.
As those trends were transitioning, similar cycles (2, 4 & 8-month) were beginning to influence a series of lows in stock indexes. The May ’21 peak – the fulfilment of 2, 4, 8 & 16-month cycles – ushered in a ~4-month decline into late-Sept ’21. A series of intermediate lows followed – at ~4-month increments.
Overlapping that, an ~8-month (~33-week) cycle had been influencing lows – subtle at first, but then becoming more obvious – in May ’20 (secondary low), late-Jan ’21, late-Sept ’21 and mid-May ’22…
On a broader basis, equities are repeatedly reinforcing the bottoms set in mid-June and then late-Sept – the bottom of an initial 6 – 10 month decline (depending on the specific index). The next broader based top is likely in [reserved for subscribers]… which could be a larger-magnitude ‘B’ wave…
On a very short-term basis, the DJIA remains in neutral territory and would not turn positive until a daily close above 14,400/DJIA or negative until a daily close below 14,000/DJIA. In contrast, the S+P 500 & NQ-100 are in positive territory and would not turn neutral until daily closes below 3963/ESH & 11,600/NQH.”
Stock indexes are fulfilling bullish 4-Shadow Signals (triggered in 4Q ’22) that projected new surges in 1Q ’23. Indexes like the Russell 2000 & S+P Midcap 400 are nearing their upside price targets (accomplishing what the DJIA did in 4Q ’22) while the NQ-100 and S+P 500 are projecting higher levels in the coming month(s) (to at least ~13,800/NQ & ~4300/ES) before their advances would have a better chance of peaking.
Those upside targets – and how/when they are reached – should reveal a great deal about what to expect leading into key cycles in late-July/early-Aug ’23.
What Did/Does 4Q ’22 4-Shadow Signal Portend for 1Q ‘23?
How High Could Latest Rallies Reach?
What Would Likely Follow Tests of ~13,800/NQ & ~4300/ES?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.