• 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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-Barry 
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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.
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-Barry 
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THE LAST BULLS STANDING

The stock market is tiring and many indices have fallen in five waves suggesting that from a late August low,  a bounce in September may be the last bull bounce.  We have outlined many ugly background noises including China’s problems, higher interest rates that are not going to stop, geopolitical tensions and the end of the leftover free Covid money as people are spending and running up their credit cards.   The banking mess will not go away either despite Yellen’s continual Pollyanna-like statements.  By early October, you are going to have to make money with short stratetgies.

If there are last plays for longs, we are looking at late August pullback lows.  Energy seems the safest and best play and you can add or buy this Wednesday on pullbacks.  We like ETFs like USO and UGA for oil and gasoline as crude oil futures project 9150 into mid-August.   Metals will have a final fall into August 21st but then look positive into early November so GLD, SLV and GDX for miners will do well.   We also think Cryptos will come back into mid-September and later in the year.

There may be a few safe sectors to be long during September like XAR for Defense and Health Care is doing better than average so watch XLV.   The DOW has been holding up the best and the ETF for the DOW DIA will be a buy at the August low for a nice run in September.  Tech may come back also in September so we are always liking MGK for the Megacap techs.   If you look around, most other sectors are starting to fail.

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.

Stay on top of the stock market and our daily analysis with the Fortucast Financial Timer or Fortucast ETF timer.  One-month trials start at 97.00. 

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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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FIRST PART OF STOCK MARKET CORRECTION LOW DUE TODAY

The first part of the correction on the stock market is due to be over today.  NQ broke and projects 15061 on NQ futures.

Watching a minimum of 4455 on S & P cash and a max. of 4434 on cash and we might as be patient as today was a turning point and they are going for the lower numbers.

Buying the dip today is gambling for PPI and a 1 week rally and it is traders play for a bounce. Inevitably we are more caught up in wanting to buy the August 22nd low for the last move up.

Cycles look positive for an upward reaction on Thursday as there has been a series of better PPI numbers lately. Higher energy prices into the Sept. high will upset the numbers next month and the question is whether today’s strong rally in crude and energy stocks will be a reminder that the end of the lower PPI numbers is over.

 
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