FOR WEDNESDAY: (12/20) We looked closely at cycles and they are rather complicated and intense and we would rather trade off of patterns. We do still favor shorts. Beans are rather oversold and wheat is the clearest sale if you need to do something. We always worry about people heading for the exits and conditions turning thin this week. The later in the week it gets, the more difficult it will get to keep stops in place or deal with huge orders that can move the market wildly. We tend not to trade much during the holidays and will wind down positions in a few days.Continue reading
Still favor S&P 2732-40 by Jan. 5
FOR TUESDAY: (12/19) We always worry about people heading for the exits and expect them to clear out by Wednesday. We do see year-end profit-taking for stocks Dec. 26-29 and fund position squaring. Always tricky. We have completed Part 1 of our Yearly Forecast issue of Fortucast and it’s available. Working on covering Bitcoin futures but may take a month to really get a handle on it.
MARCH E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR TUESDAY: (12/19) Almost at 2700. Support at 2688.50 and 2682.75. Resistance at 2712. Stocks failed to go down during the more difficult cycle of the week and not sure what will stop this market. Taxaphoria likely to continue but what happens when it passes—of course sell the fact which is why we have a sell-off next week into the end of the year.
We still favor 2732-40 by Jan. 5. The trade is pricing in a tax bill passage before Christmas and an easy resolution to the budget ceiling extension but cycles aren’t that promising for it happening so we wonder if the market will turn lower the week of Dec. 26 if either of those fail to happen.
In the end, bears will be frustrated top-picking and what are we going to get in January anyway: 70 or 110 points?
SHORT-TERM: (12/15) We looked closely at patterns and cycles and we’re still expecting 2 more highs to 2705 and 2732-40 before a dip to 2595-2600. Given that the market should hold up into Jan. 5, upper targets of 2732 and 2740 are very possible and likely. The week of Dec. 26-29 looks like year-end profit taking but at most that might be 70 points and the trade would recover it Jan. 2-5. It does then seem like a 3-week correction into Jan. 24-25 is likely with a recovery into Feb. 2.
CYCLE SYNTHESIS: Retracing Tuesday, higher into Friday; lower Dec. 26-29; higher into Jan 5 and 7.
Will wind down positions
FOR TUESDAY: (12/19) We always worry about people heading for the exits and conditions turning thin this week. The later in the week it gets, the more difficult it will get to keep stops in place or deal with huge orders that can move the market wildly. We tend not to trade much during the holidays and will wind down positions in a few days.
JAN. SOYBEANS (electronic ok)
TODAY’S COMMENTS: (12/19) Market got close to key support at 956.50 and not sure what to do because we never got decent rally. Market is really oversold and might reach 970-2 if we are lucky but it’s hard to sell an oversold condition. Key support at an Andrew’s Midline has held and much deeper and a fall to 920 could develop but we’re skeptical.
CYCLES OVERVIEW: Higher Monday/Tuesday; lower Dec. 20-22; higher Dec. 26.
Year-end profit-taking for stocks
FOR MONDAY: (12/18) Can Santa deliver much more wealth? A tax bill? Record high stocks and Bitcoin? What other cookies does he have in his bag for next week? We always worry about people heading for the exits and expect them to clear out by Wednesday. We do see year-end profit-taking for stocks Dec. 26-29 and fund position squaring. Always tricky. We have completed Part 1 of our Yearly Forecast issue of Fortucast and it’s available. Working on covering Bitcoin futures but may take a month to really get a handle on it.Continue reading
Weak grain cycles should end Sunday night
FOR MONDAY: (12/18) The worst of the weak cycles should be over on Sunday night and we should at least get a bounce for a few days before new shorts set up on grains. Cattle look lower the first few days of the week and hogs aren’t clear. We find that meat markets get very thin during the holidays and are hard to manage so we’ll mostly leave them alone as we get closer to the holidays.Continue reading
Stocks should rebound on Friday
FOR FRIDAY: (12/15) Last-minute wrinkles in the tax plan’s “done deal” sent stocks lower but a rate hike by China wasn’t helpful either. Market should rebound on Friday but looks vulnerable Monday/Tuesday so the reversal signal on stocks that came in on Thursday may be for real. There’s always a secondary high so no rush to get short. Continue reading
Meats look higher on Friday
FOR FRIDAY: (12/15) Not much happening. Larger cycle into Friday is friendly for grains but not expecting much. Market starting to set up for pre-holiday position squaring as the pits and computers empty out for Christmas. We found a weak cycle for many markets into Friday and it may negate the original friendly cycle that is due over the weekend. My guess is that if key numbers hold into Friday, then a bounce out of there will happen Monday/Tuesday but then the market looks lower into Christmas. Meats look higher on Friday but then lower early next week.
JAN. SOYBEANS (electronic ok)
TODAY’S COMMENTS: (12/15) Beans broke key support levels and should go to 956. If we do get a bounce, it won’t take out 975 and that may be the sell point but a cave in toward 956 could happen given downward momentum. That makes market is a buy at 956 and a sale at 974-5.
CYCLES OVERVIEW: Sideways to higher Friday; lower Sunday; higher Monday/Tuesday; lower Wednesday/Thursday/Friday; higher Dec. 26.
Continuation of Wednesday’s reversals into Friday
FOR THURSDAY: (12/14) Sometimes markets aren’t logical and there’s just massive fading of the expected news and technical bounces from deeply oversold conditions. That looks like the case with metals and oil and even T-notes, and stocks are not confirming yet with NQ needing 6450. We probably will see a continuation of Wednesday’s reversals into Friday and have to chase cautiously. One gets the sense that funds are taking early Christmas profits and ready to go on vacation, and that will get more apparent into next week. The issue is whether the pattern completions can come in before the holidays or even the last week of the year.
MARCH E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR THURSDAY: (12/14) Failure to accelerate here is a yellow flag but the market isn’t exactly falling apart. Often the day after FOMC is down but want to see 2655 come out, we’ll be patient. Some cycles are supportive on Thursday into noon and a larger cycle is support on Friday despite Triple Witch. Key resistance up to 2688-91 would be a better completion. I suspect that the market will hold until Dec. 20-22, and seeing 2700-5.
BIG PICTURE: The larger pattern on the S & P are becoming clearer with probably a 4th wave congestion coming between 2600-2700 and then a move up to 2920. Next weekly chart cycle high is June 2018.
OVERALL: Not sure we should think correction until 2700-5 comes in and then it might not mean much. It could be 100 points. We’re running cycles for January and February and will report soon.
CYCLES OVERVIEW: Higher into Dec. 15; higher into Dec. 20-22.
Weak cycle for many markets into Friday
FOR THURSDAY: (12/14) Not much happening. Larger cycle into Friday is friendly for grains but not expecting much. Market starting to set up for pre-holiday position squaring as the pits and computers empty out for Christmas. We found a weak cycle for many markets into Friday and it may negate the original friendly cycle that is due over the weekend. My guess is that if key numbers hold into Friday then a bounce out of there will happen early next week.
JAN. SOYBEANS (electronic ok)
TODAY’S COMMENTS: (12/14) Lower support down to 974.50 continues to hold but bounce has been feeble. With the sell signal, buying or bottom-picking is countertrend and now we’re thinking a bounce to 988 or 991.50-992 may be all we get. Counter-trend Traders can be buyers but you may only pull out 10-15 cents over 2-3 days total.
OVERALL: If we get a seasonal high into January, it could reach up to 1040-50 but it will require weather problems in South America.
CYCLES OVERVIEW: Higher Dec. 11-17.
Play the key numbers, patterns on FOMC day
FOR WEDNESDAY: (12/13) Trade waiting on FOMC for Wednesday. Everyone expects a rate hike but will Yellen throw out any grenades for her final post-FOMC speech? Christmas cookies and champagne as usual. We get a bit frozen on FOMC days and we can only play the key numbers and patterns. They tend to buy dips on the S & P and it’s not done.Continue reading