FOR MONDAY: (10/23) Despite S & P cycles that look very weak early next week, the other markets suggest that stocks might crawl slightly higher before doing a 30-point pullback. Those looking for crashes will continue to be disappointed this year and at best a 300-point S & P pullback from 2600-2300 might be possible if a minor crisis develops into the end of the year on a US budget crisis.
DEC. E-MINI S & P 500
S & P ANALYSIS FOR MONDAY: (10/23) Resistance up to 2577 for a pattern completion off of the 2542 low but extended target is up to 2580 and 2587. We could finally be a at a point where a 3-wave 4th-wave pullback of 30 points happens–and cycles are weak enough for that to happen into Tuesday and possibly Wednesday. We have learned not to top-pick on the weekend but if we see the market failing in the 2577-80 region early Monday, a good set-up should happen.
Overall the market needs to reach up to 2600 and we’ll work on a projected date for that target and then we would really need some crisis to get the market to fall to 2300, which is what patterns on the weekly chart would suggest. N. Korea, Iran and the budget deficit are the big issues hanging over the market, as well as end of the year profit-taking.
LONGER-TERM: While we should get a 20- or 30-point pullback, the chance for something bigger may not come until 2580-2600 comes in. 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: Lower
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