3RD WAVE  COMPLETION IN STOCKS A BIT CLOSER
Third waves are exhausting because they keep extending and its so hard to chase so high. . Our time window for a 3rd wave high is due within a few days into Feb. 12-13th and then we should get a 200 point pullback on the S & P which could be complete by Feb. 23rd.  Third waves tend to extend and we are looking at 5034 and 5045 and max. 5057 on S & P cash and 18090 and 18129 on NQ 100 futures.   NQ 100 futures  needs to take out 17879 to issue the start of a correction.

Bears salivate at the shorts for their next picnic basket but we do not see much as 4805 on S & P cash is all that we will get and then we have a 5th wave into late April that is due toward a minimum of  5157 and S & P cash  but it could get to 5257 easily. NDX cash has been projecting 18800.   Even with vehicles like SDS for 2x S & P shorts you might at best get a move from 2712 to 3050. Not worth playing.  For now we will wait for the 4th wave pullback and can then get back into the leading sectors like XLK for technology or XLI for industrials or XLV for health care.

METALS NOTES:
We have a key low due by Monday but we only can count on a 2 week rally into Feb. 23rd. It may be worth doing in case we finally get a pop with a crisis but metals continue to disappoint although we do like them this year and lows early next week will be key.

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KEY LOW FOR METALS SETTING UP
Gold hit 2004 overnight but is bouncing back with EU news and GDP.   It is going to have to take out 2047  to make a stronger statement and negate the project to 1985.  Still a divergent low to 2000 might be enough to attract buyers so we have to watch for an entry on Friday if the PCE index is neutral.  In any case, within a few days metals are due for a key 2nd wave pullback and will be followed by a 3rd wave advance into mid-Feb.

Silver could still still thrust down to 2165 or 2122 to complete a 2nd wave retracement into Friday/Sunday and then take off into the Feb. high.

What are the Feb. targets?  How high will metals run into the July high and into the year 2025?  With the US stock market putting in a major pattern completion off of the 1932 depression low something bigger is setting up.  Stay on top of this big move with Fortucast.

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• Will the stock market make new highs this year and then what?   When does the multiple-year slide start?
• Will gold and silver continue to dominate the financial sectors?
• What about Bitcoin?  Will the pundits be correct in reaching 100,000?
• When does the current deflation cycle end for grains?  
• For ETF traders, what sectors will outperform in the remaining push higher and when do we get in?  We noted XAR for defense as an outperform and it has done well.
• Will the soft landing happen or will 34 trillion in debt come to bite us? 
• …

(10/23)  WHAT’S NEXT FOR GOLD?
We had alerted you about the bottom in metals and they have taken off.

The current pattern would look better with acceleration to 2033 and then a pullback to 1974-77.   This is what we are looking for earlier in the week.  The market would not be done until we saw the 2087 minimum or 2127 max.     If that big pullback does happen, it’s hard to tell exactly when, and cycles are complicated this week.

Originally we had felt good about cycle highs into Oct. 29^th  but we had found a new cycle high into Nov. 10^th that could be a secondary high based on patterns.   Where will the Nov/Dec. pullback go to and how much will gold explode to thereafter?

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QUICK TAKES:

Can Powell save the world with his noon talk?   Not sure we will get the clues we need until after that time window.  Need 4402 to come out on S & P cash to be aggressive on the buy side and bottom-fishers have to wait for at least 4280 on S & P cash if not lower to 4260 and NQ 14840 on futures would look better.

We had come into this week thinking that Friday was the best day for a rally and we do like next week but it’s hard to imagine any immediate end to the Middle East mess will the market be willing to forget about it as they eventually did with Russia/Ukraine?   Today is very critical.  Given that our bias is for a down November and December, how much are you going to make if the market does climb the wall of worry?  Maybe 4456 or 4550 on the S & P cash max?

Tesla already hit 222 and it is like GM these days in terms of predicting the future of the economy and not sure Netflix can save the world.

For now, we still like metals and energy on dips but UNG and nat gas look weak next week. Defense stocks like XAR and PPA are always an option and PPA looks better as you can buy more shares at a cheaper price and it has had a lower drawdown lately.

Still sour on Bitcoin and not bottom-fishing TLT until at least 81.20 and will we see 7500 before it’s done?  Ugh.

Home Builders (XHB) look terrible with higher rates and Tesla will no longer save XLY.

So best buys of course will be PPA and metals and energy and we may consider tech if it does not fall apart today and watch XLK and MGK as a haven for  short-term plays for a nice move into next week.

We are at a time window where this market could unravel with the Anniversary of the 1987 crash today and some similar patterns in the cycles but we are looking for a trigger. It seems that the upside reward is not great unless you play the right markets we have suggested.

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EXHAUSTION AND CAPITULATION BOTTOM COMING FOR STOCKS AND METALS
Metals and stocks have fallen sharply as interest rates have risen. Within the next day or so, we should complete downward patterns on stocks and metals and start a recovery? How long will it last? Is it worth buying?  Check out our 1 month subscription order below.

We have some final 4^th wave bounces in process on metals and stock indices but should get one more flush lower. Gold is above yesterday’s low and the dollar is off Friday as maybe the Japanese intervention scared players for a day.  Copper bounced off of 357 to get back above the key 360 area.   Natural gas got to 3.03 overnight and looks much better but still waiting for 3.08 to come out to get slap-happy.   Bonds hit 106.035 overnight which was close to our key support area of 106.02 and have rocketed out of there. Crude failed to take out the breakout area and hit 8696 overnight and we should have one more push lower here Bitcoin had a dead cat bounce and is at least holding key levels.    We are in a bottoming/topping window for all of these markets but we are not out of the woods yet as exhaustion and capitulation lows are needed on everything.  That should happen in the next few days.  What are the targets?

 

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KEY METALS BUY SETTING UP FOR WEDNESDAY

The CPI is due on on Wednesday and we think it will be inflationary. Metals actually do not like inflation.  That may give metals one last push lower and gold is close to key support at 1922 and 1914 and GLD to 175.50. 

  Lower support is 1914 and we should get that pattern completed on Wednesday.    Above 1955 and 1960 we might be more friendly and not worry about 1921.  Gold would at least go to 2010   We see cycle highs into late October and early Nov. and we have a crisis cycle setting up in early October and we last saw it around Sept 11, 2001 with the 9/11 event.  Something major could happen that weak and lead to stocks falling in 4th quarter and metals being a flight to quality buy.

We see the dollar topping at max.  10535 on cash and coming off strongly and that should allow gold to recover. We have weaker dollar cycles early in the week but then we have to see the reaction on Wednesday and at the moment it looks higher and any inflationary shocks and we could see the dollar spurt up as 106.00 is not out of the question.   . 
 
That along with the fact that GDX would look better with a new low to 2680-2700 has us wondering thinking a key low is at hand. 

Oil and Technology are the last bullish sectors left and oil is due to top by Friday and technology may make it through the end of the month but the rest of the stock market is lagging.

 

When China Sneezes

Fitch put China on a warning to downgrade their debt and that is a huge warning to the world.  I remember when China had major problems in 1998 and it how it impacted the US stock market.  They are struggling with unpaid real estate loans, massive youth unemployment. They cut their rates in an attempt to stimulate their economy, but is it enough?  Some recent problems:

Country Garden just defaulted;

Zhongzhi Enterprise Group missed payments on high-yield investment products;

Recent bank loan data were terrible;

Industrial production 3.7% y-o-y (4.3% expected),

Retail sales 2.5% y-o-y (vs. 4.0%),

Fixed asset investment 3.4% y-o-y year-to-date (vs. 3.7%),

Property sales -8.5% y-o-y year-to-date (vs. -8.1%),

Unemployment 5.3% vs. 5.2% (not to mention that youth unemployment which just hit all time highs, will no longer be reported for obvious reasons).

The US markets are taking notice.  The failure  to rally on Tuesday was a yellow flag and of course when China sneezes, the whole world notices.

For the S & P: Key cash support overnight is at 4427 and 4411 and cash will need to get above 4477 to turn the corner.  We are very open to 4375-4385 before we get a reaction on cash.  With world crisis cycles next week, the 4311 and 4275 areas are not off the table for the August low before the market comes back in September.  As we have noted, we think that will be a 2^nd wave bounce and not the new high we had hoped for in September.
Geocosmic and geopolitical cycles are a mess next week into the 28^th and some larger crisis is out there, particularly with Jackson Hole, the BRICS meeting in South Africa, and the FOMC meeting all hitting.
Stay on top of our long-term forecasts for the fall and how to make money when you will have to short.  What do we do about the repeat of the 1987 crash cycle in October.
Stay on top of the stock market and our ETF picks with  daily analysis with the Fortucast Financial Timer or Fortucast ETF timer.  One-month trials start at 97.00.

-Barry 
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For short-term traders and moderately active swing futures traders. Markets covered: S&P 500 T-notes Dollar Euro Gold Silver Crude Oil Bitcoin Futures.

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