Cycles are likely to be more erratic on Tuesday and the market is already behaving strangely with new anxiety with Europe, Italy and Greece and France. We have to go with our original forecast for the week but some markets are a bit out of sync. Chalking it up for a typical post weekend hangover from the Super Bowl and back to business as usual on Tuesday?
MARCH E-MINI S & P 500
S&P ANALYSIS FOR TUESDAY: (2/7) Monday had the best cycles for the week so we have to wonder if this market can still accelerate. We’re running out of time but are open until the end of the week. Three waves down projects 2281.50 and much below 2277 might start the bears exiting; otherwise, the market could squeeze out a double-top to 2299.50 very possible and slight new highs to 2301.50 and 2309.50 seem inevitable. NQ cash closer to double-top at 5174 with new highs to 5180 and 5205 probably coming.
OVERALL: Given no pullback, we have to go with our original idea: S & P above 2287 is projecting 2295 with pullbacks to 2288.50 and 2285 probably holding on Sunday. First pattern completion within a few days to 2310 and then a pullback and then an extended target is up to 2317-8 into early next week or as late as Feb. 11. We’ve learned not to be a martyr about top-picking and while we’re getting close to a key weekly chart high, it’s not quite in yet. Still, 2310 will be hard to take out right away and we won’t rule out 2332 on cash to have an absolute completion.
WEEKLY CHART: Overall, we continue to look for topping action and a 100-point S & P correction over the next few months. Market a bit too oversold to jump into sales without a 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.
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’s 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: Topping Tuesday.
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