Category: Financial Markets Update

FOR MONDAY: (1/15) The trade likes these trending situations and the computers eat them up and accelerate them. Between the good news for the euro and trending stocks, it’s easy just to throw money at them and make money. Long weekends can reverse situations. Topping energy for gold and bottoming for the dollar by Sunday and then a reversal there until Jan. 24. Stocks should stall at 2800 and get jitters before the budget ceiling. Starting to run out of time for the exuberance cycles but S & P projecting 2980 on the SP, and we originally thought that might take until June but easily will come in sooner.

MARCH E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.

S & P ANALYSIS FOR MONDAY: (1/15) Market very close to key pattern completion at 2793 but if 2805 comes out the extended target is up to 2828.25. There’s a five-count complete from the Chinese rumor fall but not sure we can count on a 70-point pullback. Much above 2800 and the market is projecting 2989 on the daily chart. Greed has not restraints. No point in top-picking. Market couldn’t fall today during the weakest cycle of the week. Open to seeing it come off on Sunday night but not sure it will mean much without a lot of news.

NEAR TERM: Patterns suggest the need for 70-100 point pullback and that could start soon but it will be inconsequential with such a strong start to the year. The most bullish pattern would allow only a 30-point pullback and then a 100+plus point move up. We exited with nice profits on our ETF position.

SHORT-TERM: (1/05) We think the market will cause near 2800 and at least congest sideways with some cycles suggesting a pullback into Jan. 19th. Not sure what will happen but we do have the debt ceiling coming up again for Jan. 19. It does then seem like a correction into Jan. 24-25 is likely with a recovery into Feb. 2.

CYCLE SYNTHESIS: Topping and lower Sunday; retracing into Jan. 19.

FOR THURSDAY: (1/11) Did we react too quickly on the China news? Have to see what happens on Wednesday night. The rumor is now unconfirmed so will it be back to business as usual? We got caught in the knee-jerk reaction and now have all kinds of conflicting data.

MARCH E-MINI S & P 500
S & P ANALYSIS FOR THURSDAY: (1/11) A 3-wave bounce for a secondary high would go to 2758.50. If you got short, have to have stops above 2753.50 and even 2752 is too much. We’re more clear that Friday is lower and so we have to think that a secondary high can come in.
OVERALL: S & P broke 2740 and 2760 was close enough to 2762 to have completed 5 waves up. That could mean that the 70-point pullback into Friday is starting to 2690. The most bullish interpretation left would be hold 2730 and matching the 30-point correction we had on the last day of the year and then going to 2790. Given our orientation toward weaker action into Friday and somewhat dire news out of China—that could change—we have to go with shorts now.
CYCLE SYNTHESIS: Lower into Jan. 12; lower into Jan. 19.

FOR WEDNESDAY: (1/10) Breakout on crude today is a game changer but we do have a cycle high due by Thursday and a 2-week correction coming but inflation is back. S & P has its best opening for the year in 30 years and we’re not going to throw cold water on this wonderful event. Our work had suggested a pullback is due but will it be much and matter if 2780 comes in first?Continue reading

FOR TUESDAY: (1/09) Not sure we learned much from Monday’s action and the NE is still digging out from its storms. There are two very energetic cycles on Tuesday and they may bring surprises, so do not get too complacent. In the past these cycles have been bad for gold so continue to move stops up and take profits there.Continue reading

FOR FRIDAY: (1/05) S & P close to key target zone at 2732 but will anyone be around to trade on Friday with the Bomb-Cyclone even if they trade from their homes? Natural Gas prices at record highs are not great for inflation and commodity prices have risen strongly since the US raised rates so the deflation block may finally be lifting but what happens if the economy doesn’t really pick up? Cycles highs still due into Sunday and maybe Wednesday for some of these trending markets so there’s still inflation money left.

MARCH E-MINI S & P 500
S & P ANALYSIS FOR THURSDAY: (1/05) No rest for the bulls as 2731.50 is only 6 points away. Computer patterns could allow a pullback to 2716 and then a new high to 2749.50. There is still time for this to happen and we will not top-pick a bull. NQ has room to 6700 and DOW futures have closed over 25000 so what’s there to worry about. We could easily see profit-taking set in Friday as New Yorkers head for their bomb-shelters if they make it in. Let’s pray for no power outages as they could be life-threatening. The next pullback could be 70 points but that would look like nothing and it may happen from 2749.50.
SHORT-TERM: (1/2) Inclined to think that the trade will buy the market Jan. 2-5. It does then seem like a 3-week correction into Jan. 24-25 is likely with a recovery into Feb. 2. Now we have the Jan. 19 debt ceiling to deal with or will they kick it down the road again?
CYCLE SYNTHESIS: Higher into Jan 5 and 7; lower into Jan. 12; lower into Jan. 19.

FOR FRIDAY: (12/22) Very difficult to go into the weekend with a position, as there are often reversals with these holidays and conditions are thin and exaggerated. Three-day weekends are notorious for reversals and we always worry about weekend terrorism over Christmas, and those cycles are likely still through next week. Our staff will advise Tuesday about plays next week but if we get a bunch of gaps and no completed patterns, then it will be difficult to play.Continue reading

FOR THURSDAY: (12/21) It doesn’t take a rocket scientist to sell the fact of the tax bill or the S & P near 2700. On top of it we’re dealing with people heading for the exits and year-end position squaring. Usually you get a lot of congestion going into the end of the year but sometimes some big moves if unwinding is going to happen. Sometimes we like to position trade but often on Dec. 26 there’s some bizarre move in thin conditions that no stop can handle– and that’s why we’re probably going to do very few short day-trades or 2-day trades the rest of the year based on morning conditions. 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

FOR WEDNESDAY: (12/20) As we move into the holidays, we always worry about trading as patterns don’t come in or they take a long time to come in. Action can be erratic and weird and we wonder if anyone is really trading. In the end we have to wind down from positions unless we’re ready to hold a while with a big stop. 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

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.

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