Stocks Reinforcing Likelihood for Multi-Month Bottom!
10/15/22 Weekly Re-Lay – “Stock indices dropped below their mid-June lows, fulfilling the weekly trend and intra-year trend signals of mid-Aug and cycle downturn in mid-Sept. This reinforces the overall outlook for 2022/23 even as weekly cycles could produce a longer-lasting low at any time. A couple key indexes are holding their mid-June lows and could lead a rebound…
Stock Indices remain in intra-year and weekly/monthly downtrends after rebounding into mid-Aug ’22 and retesting year-opening lows and reversing lower (after failing to turn their weekly trends up). They are attacking major 3 – 6 and 6 – 12-month support & downside targets at 3560 – 3610/SPX and 10,700 – 11,100/NQ, which should help determine their outlook into year-end.
On a 1 – 2 week basis, they dropped into mid-month after failing to turn their intra-month trends up during the early-Oct rallies. That, along with daily trends and negative daily 21 MACs, short-circuited those rebounds and sent stocks back to their lows while inverting the daily cycles on Oct 14/17.
Some key Stock Indices (Russell 2000 & S+P Midcap 400, which have led previous reversals) continue to hold their mid-June lows, reinforcing the significance of major support in the other indices.
Corroborating the potential for a multi-month low, the Russell 2000, S+P Midcap 400 & DJTA have 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.
That would also be in line with the monthly 21 MAC progressions (see 10/14/22 IT Stock Index Update for add’l details)…
Stock Indexes (and a collection of other markets) provided a brief, violent spike low on Oct 13, coinciding with the release of the Sept ’22 CPI data, fulfilling short-term analysis as well as daily trend patterns. Several of them have still not turned their intra-month trends down (or up), leaving them in neutral territory on a 1 – 2 week basis.
Though a low may be forming, they need to do substantial work – in the form of upside price breaks and indicator triggers – to signal that anything more than another 3 – 5 day low is intact.
In the case of the DJIA, it spiked to a new low and has already twice neutralized its daily downtrend. It would take a daily close above 30,428/DJIA to turn that trend up. The DJIA also completed a weekly 2 Close Reversal higher, but needs confirmation.”
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.
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.