FOR THURSDAY: (3/30) A string of inside days didn’t reveal much. We continue to suggest cycle highs for gold on Thursday and cycle lows for the dollar and stocks, and how much they fall will be key. Month-end position squaring by funds will hit by Friday and be a factor. We do want to sell gold and silver in case they come off sharply for the end of the month.
JUNE E-MINI S & P 500
S&P ANALYSIS FOR THURSDAY: (3/30) Market failed to breakdown and NQ hit 5436 close to a double-top. We favor lower prices until at least Thursday morning and probably a bit longer but without a solid break of 2043, we wonder if we’re still in the middle of sucker-punch. Market stays below 2360 and heads lower 2-3 days here or a breakout above 2362 would lead to 2370 and 2372 and create a more complicated congestion pattern. Hoping that month-end profit-taking will extend downward action into Friday for the final day of the month.
OVERALL: The issue now is whether the market stays above 2320 the rest of the week opening up a move congestive trading ranges between 2318-2370 or whether it breaks down so that the lower numbers can go to 2300. Taking out 2362 overnight would not be good. We have seen this “sucker-punch” pattern so often that bears really have to be very careful as greed has no bounds. Moving on quickly to the tax cuts is something exciting that the market has been building in for months. We’re still wondering when the Treasury budget deficit is going to rear its ugly head again.
PATTERNS: The only new pattern that has emerged is that a move complicated 3-wave bounce could emerge after 2360 comes back in. That could be followed by another b-wave and then still a chance for 2370-2, and we can’t discount that.
BIG PICTURE: We’ll still go with the idea that a break to 2250 is more likely over the next 30 days vs. new highs to 2417. It also means that that May secondary high may not have much chance to take out 2400 and that the larger focus should be on the October low toward 2150 and 2050.
SHORT-TERM: (3/22) Seasonally, late March is often lower for stocks and we had started to give up on a deeper break and had been looking for 80 points on the S & P for a while and it has come in, and we are not bearish enough to get back to that just yet but a close under 2300 would open up the door to something much bigger. Given that the market has such downward momentum, we wonder if we’re starting a 160-point correction toward 2240. The most obvious target is a fall to 2295-2304 into March 31 and then what kind of a bounce we get into April 7 and April 15 will be revealing. We expect some kind of secondary high into May 12 and possible it would be a new high.
LONGER TERM: (3/27) Still can’t officially say we have a weekly chart sell signal until 2300 comes out on a closing basis. It may be a while before we know if a weekly chart top is in. Expecting a May high and a new NQ high unless NQ takes out 5200–and if that’s the case, we’ll get a divergent S & P high to maybe 2420. Expecting that 2050 is possible into October for a 15% correction and cycle low and if the market closes under 2300, we would see 2200. Too early in the game to get too beared up but you can favor shorts into the week of April 2-6 and watch pattern completions. Still have to pick your spots carefully.
CYCLES OVERVIEW: Lower Thursday and probably part of Friday.
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