MORNING COMMENTS:
Cash hit 6634 overnight, and let’s see if that leads to acceleration at 6657 on cash which could happen before FOMC on Wednesday or the minimum is done. . . NQ Dec. futures hit the 24630 area that we mentioned last night, and are starting a correction.
DEC FUTURES NEW THOUGHTS:
Futures are positive for an extended 5th wave to 6719 max. If 6510 holds. That could be a pre or post reaction to FOMC but does not have to happen. Pullback to 6598 , OR 6573, or 6538, possible as 4th wave. The extended diagonal target is likely now at 6719 and is not favoring the upper resistance at 6750. Not clear how this fits into our timing models. Will the 4th wave come after the FOMC announcement? That would make sense based on cycles.
Bottom line: We usually avoid fighting the long side on a Tuesday, but NQ is stretched out quite a bit, and I wonder if the market will become congested while waiting for the news on Wednesday. Again. We may only get a 250-point reaction to the downside over the next week on the S & P
Market Recap
· Cash Index (Monday Close): 6,615
· December Futures Settlement: 6,674.25
· Cash/Futures Spread: ~59.25
Key Observations
· Correction Risk:
Current technical and cyclical indicators do not suggest a significant correction. Until cash breaks 6,212, deeper downside projections remain speculative. Despite geopolitical stressors (Nepal, France, Japan, and the assassination of Charlie Kirk), the market has largely shrugged off risk events.
· Resistance Levels:
o Cash: Key resistance at A breakout above 6,625 could extend toward 6,653, with an upper stretch target at 6,692–6,700.
o December Futures: Breakout above 6,680 targets 6,719. Extreme upside not expected beyond 6,800 in the near term.
· Support Levels:
o Futures: Initial weakness if 6,519 breaks, followed by 6,500, 6,473, and 6,425.
o Cash: Minor breakdown starts at 6,545; stronger confirmation at 6,360. Only a break below 6,212 would open the door to a potential move toward 5,600.
Short-Term Timing & Cycles
· Best Window for Pullback: September 17–24.
· NASDAQ Cycle: Remains friendly into October 2, suggesting relative resilience.
· FOMC Considerations:
o The session on Sept. 17 could trigger volatility if the expected 50 bps rate cut is not delivered. Even if delivered, the risk of a “sell the fact” response remains.
o Historical tendency: markets trade higher on the Tuesday before a rate cut.
Seasonal and Geocosmic Factors
· Late September/Early October: Historically softer period, with risk of a 400-point pullback (e.g., from 6,700 toward 6,285, probably the max).
· Seasonal Recovery: Strength often returns into late October; cycles show potential for renewed buying Sept. 29–Oct. 3.
· October Weakness: Expect pressure into the week of Oct 5-Oct. 11, before typical year-end seasonal strength resumes.
· Geopolitical Overlay: Ongoing risks from Ukraine, Europe’s financial fragility, and U.S.–China tensions could serve as catalysts for downside shocks.
Strategic Outlook
· Upside Targets (Fall/Winter): Extended cash projection to 7,144, with bullish cycles supportive into January 2026.
· Downside Scenarios: A corrective move to 6,375 is most probable; a deeper slide to 5,800–5,600 would require a severe geopolitical or financial shock.
· Trading Strategy:
o Use rebounds to trim positions or take partial profits, especially on late entries.
o Avoid aggressive top-picking; cycles suggest higher levels remain possible.
o Maintain awareness of Fed timing (Sept. 17–18) and seasonal patterns.
Cycle Snapshot
· Sept. 17–18 (FOMC): Volatility risk; likely downside reaction
· Sept. 19–24: Pullback window
· Sept. 29–Oct. 3: Recovery phase
· Oct. 6: Higher
· Oct. 11: Seasonal weakness
Bottom Line
The S&P remains in a ranging bull market with resilient upside momentum. Near term, watch Sept. 17–24 for a corrective phase. At the same time, geopolitical risks remain a wild card. Central cycle highs point toward January 2026, with 7,144 as a longer-term extended target.
