Stocks Trigger New Buy Signals; Project Jan/Feb ’23 Surges with NQ-100 Leading.
01/07/23 Weekly Re-Lay – “2023 has begun with some powerful corroboration to weekly, monthly and even yearly cycles and trends. Stock Indexes sold off into synergistic weekly & monthly cycles bottoming in early-Jan ’23 and are poised to rebound from there. They are trading inversely to how they began 2022 and could continue that (reverse) parallel in the coming weeks…
Stock Indices have initially bottomed in line with multiple weekly cycles and the weekly trend patterns. During the recent sell-off, most indexes (except NQ-100) neutralized their new weekly uptrends multiple times… but did not turn them down. That left them in positive territory, preparing for an early-Jan low and onset of a new rally.
Weekly cycles converged in early-Jan and corroborated that. The recent low fulfilled a ~20-week high-high-high-high-(low) Cycle Progression in the Russell 2000 & S+P Midcap 400 and came within days of fulfilling a ~15-week high-low-low-low-(low) Cycle Progression in the Russell 2000.
It also fulfilled an overlapping ~7-month/~30-week low (Mar ’20) – low (Sept ’20) – high (Apr ’21) – high (Nov ’21) – low (Jun ’22) – (low; Jan ’23) Cycle Progression in the Nasdaq-100. Considering the structure of the weekly trend patterns, most indexes are likely to rally to new multi-month highs (above Nov/Dec ’22 highs) in the coming weeks.
Corroborating the potential for an intermediate low, the NQ-100 set its lowest daily close on Dec 28, ’22 (the lowest daily close since Sept ’21) fulfilling its weekly trend pattern while retesting and holding major 6 – 12 month support (10,700 – 11,000/NQ) in the process. That also identified the ideal time for an intermediate low & reversal higher.
In contrast to how 2022 started, stocks are now showing signs their declines have run out of steam (in early-2022, it was their advances running out of steam) and another intermediate rally could soon take hold. (In Nov ’21 – Jan ’22, stocks peaked, sold off, then rallied to a divergent peak in early-Jan ’22. In Nov ’22 – Jan ’23, stocks bottomed, rallied, then sold off to a divergent low in early-Jan ’23.)
If stock indexes are able to exceed their late-2022 highs, they would likely extend these rallies – on balance – into March ’23 (see Jan ’23 INSIIDE Track for related analysis).”
Stock indexes fulfilled projections for large 4Q ’22 advances back to their Aug ’22 highs – led by the DJIA, which was forecast to reach 34,200 – 34,600/DJIA. Those 4Q ‘22 rallies generated new 4-Shadow Signals that auger new rallies in 1Q ’23.
A powerful convergence of weekly cycles & weekly trend setups corroborate that, pinpointing the beginning of 2023 as the time for a new 1 – 2 month surge to take hold. Friday’s outside-day/2 Close Reversal buy signals (S+P 500 & NQ-100) and weekly 2 Close Reversal buy signal (NQ-100) are validating projections for a new ~2-month advance after recent declines ‘ran out of steam’ in late-Dec ‘22.
What Does 4Q ’22 4-Shadow Signal Portend for 1Q ‘23?
How High Could (Expected) 1Q ’23 Rally Reach?
How Would That Influence March ’23 Cycles?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.