FOR WEDNESDAY: (11/1) We have a low-confidence read on the FOMC announcement and reaction. It seems that most of the time the pundits are wrong about these things anyway so you usually can fade the news. At the moment, we have a bias toward lower dollars and higher gold into Friday and lower T-notes into Thursday and a possible pullback for stocks, which of course will be bought. The trade is also waiting on employment report so it could be a big reaction and then another hurry up and wait until Friday.
DEC. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR WEDNESDAY: (11/1) Not much to add to last night. A bullish FOMC reaction would take the market up to 2588. The worst downside might go to 2553.75 and given the way this market runs, that would be a long shot. Cycles are such that break after the report are there. We often see a move higher 5 points before the news and then a pullback.
OVERALL: After the first few weeks of November, market looks lower into Thanksgiving–and if that major target of 2600 does come in, it may set up a 300-point correction finally. But until then, it should be business as usual. There is a sense that volatility is going to increase and having wide swings in a choppy range would make sense.
LONGER-TERM: 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: Volatile Wednesday; higher Thursday.
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