FOR THURSDAY: (11/2) This has been a doggy week and Wednesday’s FOMC action was the least volatile I can remember in 20 years. Trade waiting on employment report but markets are a bit stretched out and should start retracing on Friday.
DEC. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR THURSDAY: (11/2) Ended up being a dud day and we can make a case that minimum patterns were completed on the cash charts but 2592 would be more ideal, and that is close to 2590 on futures. Thursday had looked higher but we’re at a point where a 35-point correction on futures would go to 2550 before a new high to 2604-5. If Thursday is sideways without new highs, then a negative employment report could trigger the 35-point correction and then one last new high to 2604. Will look for clues in the morning on how to trade this market. We definitely want to sell a divergent new high or a bad failure. Friday seems like a more secure downward day.
OVERALL: After the first few weeks of November, market looks lower into Thanksgiving–and if that major target of 2600 does come in, it may set up a 300-point correction finally. But until then, it should be business as usual. There is a sense that volatility is going to increase and having wide swings in a choppy range would make sense.
LONGER-TERM: Cycles are intense in the world but the market continues to ignore them. At best if we are to get a pullback to 2320, it may come from 2600 and it may take more time to manifest, with December being vulnerable with the budget deficit.
CYCLES OVERVIEW: Higher Thursday; lower Friday.
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