Stocks Validating Dec 20 Lows; Focus on Jan/Feb ’23 for New Rally.
12/27/22 Weekly Re-Lay Alert – “Stock Indices have consolidated after their recent sell-off (into Dec 20), which took place immediately after the DJIA fulfilled ongoing projections (since late-Sept ’22) for an 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… before a multi-week peak would take hold.
During this recent consolidation, some indexes have neutralized their daily downtrends multiple times while bouncing back to their original intra-month lows (now support turned into resistance). Some of them (DJIA, S+P 500 & 400) are approaching the levels of their declining daily 21 Low MACs – reinforcing the pivotal nature of current price levels.
Some additional upside is still possible but the overall intermediate outlook is still for a decline into a critical convergence of cycles coming into play in the first half of Jan ’23. That is when multiple weekly cycles converge in indexes like the Russell 2000 (see HCP diagrams, first published in late-Sept ’22).
From the perspective of the NQ-100 – which has remained weak and often led sell-offs in the market – a low next month would fulfill a ~30-week/~7-month low (Mar ’20) – low (Sept ’20) – high (Apr ’21) – high (Nov ’21) – low (Jun ’22) – (low; Jan ’23) Cycle Progression.
Those cycles were reinforced by the rally into mid-Nov ’22 – the midpoint of the ~15-week cycle in the Russell 2K… For now, Stock Indexes were expected to bottom on Dec 20/21 and then rebound into Dec 27 – 29. That remains the case.”
Stock indexes fulfilled projections for large 4Q ’22 advances back to their Aug ’22 highs – led by the Dow, which was forecast to reach 34,200 – 34,600/DJIA in late-Nov/early-Dec ’22. That fulfilled its Oct 20/21 buy signal (see Oct & Nov ’22 INSIIDE Tracks & Weekly Re-Lays for details) and ushered in a 1 – 2 month top.
From a broader perspective, those 4Q ‘22 rallies generated new 4-Shadow Signals that auger new rallies in 1Q ’23. A myriad of weekly cycles corroborate that, pinpointing the beginning of 2023 as the time for a new 1 – 2 month rally to take hold. Weekly extremes (HLS levels) are projecting lows by/in early-Jan ‘23.
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.