FOR THURSDAY: (2/2) Trade waiting on employment numbers on Friday. The day after FOMC is more often down for stocks so sideways to lower is possible, although any good news would be exaggerated to the upside by strong cycles. Will exit short dollars on Thursday if the market cannot fall apart overnight.
MARCH E-MINI S & P 500
S&P ANALYSIS FOR THURSDAY: (2/2) Not sure we learned very much on Wednesday. Resistance at 2280 and 2288 and 2300. Still waiting for a slight new high but the minimum has come in for a bounce area. We’ve seen so many false corrections over the years that we can’t be ravenous to be a seller on futures for position traders as something often comes to the rescue for this market and it may be Facebook earnings tonight. Even Monday’s dump was the typical 35-point pre-FOMC announcement fall that happens so often. Moreover, there are an unusual number of positive cycles between now and Sunday and while Trump whiplash is a regular occurrence, funds always want to buy. Bearish position traders have to consider puts or ETFs like SDS into the end of the month but we’re not going to rush into it…maybe Monday would be the earliest time window we might consider. Patterns currently suggest 2300 or 2309. Surprise would take us to 2259 or 2257 but that probably won’t happen.
OVERALL: Our longer-term work continues to point toward a 100-point S & P correction into early April in 3 waves with the first push lower into Feb 28 and then a huge and quick recovery into early March for a B-wave recovery. Given the atmosphere out there, we wonder if it will be more. Open to a major short into Feb. 26-28 but have to pick your spots carefully.
THIS WEEK: Still should get a final push up to a new high. If we get a quick recovery of 78% off of the 36-point range to 2290.50, then the 4th-wave congestion triangle will probably be assured and easy to play.
NEAR TERM: It’s possible that a key high for the winter could be in by Feb 6-10 and that highs into the week of Feb. 6-10 are secondary highs. We’re still open to a major pattern completion on cash at 2332 into early Feb but it is probably down to 30% chance to happen and 2309 would be welcome. . The last pullback 2nd wave on the weekly chart was a congestive fall over 10 weeks. If that is the case again, it could be that we have a 100-point congestive pullback into the week of April 9.
CYCLES OVERVIEW: Higher into Friday.
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