FOR WEDNESDAY: (11/8) We have a low-confidence read on the week, with a key cycle into Thursday/Friday suggesting a low for stocks, a high for notes, a low for the dollar and a high for gold and higher prices for crude. We’ll give stocks a chance on Wednesday for a divergent high. No major reports on Wednesday so the trade may have trouble going anywhere.
DEC. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR WEDNESDAY: (11/8) Stocks are tiring and the pullback to 2580.50 was not the end of the world but not a move that we really wanted to see. Taking out 2577 might negate 2600 or higher. Cycles seem more optimistic on Wednesday so we’ll see if NQ can make new highs and pull stocks up but harder to chase longs.
SHORT-TERM (11/3) Stocks are running out of time for more upside. Upper cash pattern completions are at 2617-8. We could see the market hold up as late as Nov. 13 but the market looks lower into Nov. 17 and while the market is often up into Thanksgiving, at best it looks sideways to lower and then lower into Dec. 6-8 around the budget crisis deadline. It does look like a Christmas recovery will happen the week of Dec. 11-15 and possibly into the Dec. 22.
OVERALL: We’ve been watching 2600-4 as a key pattern completion for futures but that could extend to 2615-20 based on cash patterns. At the moment, we can only count on a 110-point pullback into December, which would be less than 5%. We think that 2490-2500 will hold dips this year.
CYCLES OVERVIEW: Higher Wednesday.
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