FOR WEDNESDAY: (8/30) Sucker punch day on Tuesday. To us, they all look like 4th waves but we’re concerned about thinning conditions before the holidays as well as month-end fund profit-taking and contract rollovers for notes and silver. Have to take profits early because of all the above but if we hold into Monday/Tuesday, upper targets should come in.
SEPT. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR WEDNESDAY: (8/30) We weren’t patient and fell for the sucker punch and lost 13 points. Key resistance on the week again at 2449 has held. A minor wedge line comes in at 2452 overnight and support at 2439.50. Some cycles are friendly on Thursday so the market may take its time to get up to 2460 over the next 1-2 days. One pattern suggested that the overnight low was a B-wave and that a C-wave would go to 2460 on the S & P and 5908 on NQ 100 futures. If we see 2459, we would sell but it may not get up there and now we have to wait for the next crazy tweet or news flash.
Given that we think 2400-5 will hold this week, we now have a bit more room for downward potential. Happy to have volatility back but always crazy.
OVERALL: We’re still open to 2405 by Labor Day. Not sure the hurricane will be good for the economy and that may set a messy tone the week. If we really want a serious buy, we need to wait for 2405 and as late as Labor Day. War aggression could increase given provocation.
WEEKLY CHART: There’s still a good possibility that based on patterns that the current fall is a 4th wave and that a new high to 2500-2520 would be possible in September but a secondary high to 2477 is more likely. In the end we still will have a minimum fall to 2360 or max. 2300-2320 as a fall correction target with a multi-year high due into 2018. Market needs to hold 2400 into Labor Day and shoot out of there to open up that scenario.
CYCLES OVERVIEW: Recovering Thursday/Friday.
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