Stocks Selling Off to Weekly Extremes; 1 – 2 Month Lows Should Follow.
12/17/22 Weekly Re-Lay – “Stock Indexes sold off sharply in fulfillment of the Nasdaq’s Dec 9 weekly trend sell signal (re-entering weekly downtrend after repeatedly failing to turn that trend up) and the daily 21 MAC (negative) signals in other indexes on Dec 13/14.
That completed the topping phase after the DJIA fulfilled ~2-month projections for a strong rally to ~34,400 (4th quarter gain of ~20%) leading into early-Dec ‘22…
Stock Indices spiked higher into Dec 13 with many setting new intraday highs and fulfilling the outlook for the longest rallies in 2022. In most cases, the spike highs extended the latest rally to 61 days (Oct 13 – Dec 13), exceeding the previous June 17 – Aug 16 rally (60 days) by a day.
Leading into this week, the Dec 12 action was expected to be critical – determining when and how certain levels could be tested. In the case of the DJIA, it was expected to test monthly and weekly support (32,750 – 32,800/DJIA) at some point in the week… and at some point around mid-month.
Stocks bounced to begin the week, delaying the drop to those levels until late-week. The S+P had an even greater synergy of weekly support, extreme targets and near-term (downside) objectives around 3862/ESH – where 3 of the latest 4 weekly HLS levels (3848 – 3861/ESH) converged with the weekly 21 Low MARC (3862/ESH) and monthly support.
The real ‘canary in the coal mine’ has been the NQ-100, ushering in a bearish period after its Dec 9 weekly close (failure). To reiterate from last week:
12-10-22 – “The NQ-100, continues to lag the others and reinforce its overall bearishness… its Dec 9 re-entry into the weekly downtrend, could ultimately spur a retest of the Oct 13 low.”
All of this occurred right after the DJIA fulfilled ongoing projections (since late-Sept ’22) for an overall advance into late-Nov/early-Dec and to 34,200 – 34,600 – a 4th quarter gain of ~20% that fulfills the 12-Year & 24-Year Mid-Term Election Cycles. It peaked at 34,595/DJIA.
It also occurred as the DJIA provided an intraday spike high on Dec 13 – fulfilling its 16 – 17-week high (Jan ’22) – high (Apr ’22) – high (Aug ’22) – (high; Dec 5 – 16, ’22) and ~49-week high (Feb ’20) – high (Jan ’21) – high (Jan ’22) – (high; Dec 12 – 19, ’22) Cycle Progression… ushering in a pivotal peak…”
Stock indexes fulfilled projections for the largest advances in 2022 – led by the Dow, which was forecast to reach 34,200 – 34,600/DJIA in late-Nov/early-Dec ’22, on the heels of its Oct 20/21 buy signal. (See Oct & Nov ’22 INSIIDE Tracks & Weekly Re-Lays for details.) They reached that objective, with most indexes retesting their mid-Aug ’22 highs, ushering in a 1 – 2 month topping phase. These 4Q ‘22 rallies have generated new 4-Shadow Signals that auger new rallies in 1Q ’23.
Weekly extremes (HLS levels) are being attacked, projecting 1 – 2 month lows in the ensuing weeks.
How Soon is Correction Low Likely?
What Does 4Q ’22 4-Shadow Signal Portend for 1Q ‘23?
How Would That Reinforce March ’23 Cycles?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.