FOR WEDNESDAY: (3/29) Some markets are looking like they’re reversing but key numbers we discussed on Monday night have come in and now the weak cycles for stocks have to kick in the next few days to support all the positions we anticipate. We’ll wait for the morning to take new position. If we get weak retracements, then the market will start being more convincing for gold bugs and bears in the stock market.
JUNE E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR TUESDAY: (3/29) S & P completed 3 waves up and anything above 2362 would start project 2370 and 2375. 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 to 2300. We’re open to a retest high in the morning and not seeing any reason to trade overnight. 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 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 Wednesday/Thursday.
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