Category: Financial Markets Update

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

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.

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

FOR TUESDAY: (12/12) 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. Not much happening on Tuesday.Continue reading

FOR FRIDAY: (12/8) Kick-the-can down the alley has happened with the House of Representatives, working against a Friday midnight deadline, approving legislation to fund a wide range of federal programs through Dec. 22 and sent it to the Senate, which approved it as well. The White House has said Trump will sign it into law. With a Congressional recess starting Dec. 16, they have another week to duke it out. In the meantime, FOMC is sneaking up next week so not likely to get acceleration with anything until that gets out of the way.Continue reading

FOR THURSDAY: (12/7) While the debt ceiling is an issue, the Treasury can find emergency money buy borrowing from the Government employee pension fund like they have done before. The U.S. Treasury would exhaust all of its borrowing options and run dry of cash to pay its bills by late March or early April if Congress does not raise the debt ceiling before then, the non-partisan Congressional Budget Office said on Thursday. “If the debt limit remains unchanged, the ability to borrow using extraordinary measures will be exhausted and the Treasury will most likely run out of cash by late March or early April 2018,” it said. So Friday’s deadline is a bit artificialland we wonder if the meeting with Bernie Saunders and Elizabeth Warren and Trump will produce any progress.Continue reading

FOR WEDNESDAY: (12/6) Should be a mini-climax overnight for stocks and we should get a rubber-band bounce as is often the case here. Tensions over the debt ceiling may fray nerves. Gold looks like a bounce from Wednesday’s low into Friday so too late to sell.Continue reading

FOR TUESDAY: (12/5) Chances are a congestion triangle is forming on stocks and once you recognize the pattern it is rather predictable. We can get away with short stocks into early Wednesday and should get a bounce to get in from. Hoping we can get into short gold also. Scared about the dollar with the budget ceiling finally getting paid attention to.Continue reading

FOR FRIDAY: (12/1) News-flow around the tax bill is a bit untradeable and we remain skeptical that Congress will get their act together before the Christmas recess by Dec. 14-15. Bubble cycles are peaking here and the market may be vulnerable next week. NQ remains top heavy and SP has gone 20 points above long-term targets. Definitely in nose-bleed territory and we’re not fond of trading news markets. Will advise in the morning.Continue reading

FOR THURSDAY: (11/30) Month-end profit-taking could hit on Thursday and market volatility is up and bubbles are bursting even with Bitcoin. Still, energy may remain optimistic overnight and could bleed into Thursday if they like progress on the tax bill. We can’t count on bubble bursting energy and even NQ’s free fall today was a technology glitch by Fidelity. The employment report is not until Dec. 8 and somehow we thought it was Friday and now the budget deficit ceiling deadline and employment report bleed into the 8th. Have to think the trade will get nervous after this weekend but we continue to rely on patterns and technicals to keep us of trouble. Very key minimum weekly chart resistance is close at 2640. Near the close, after a full day of debating the GOP tax reform bill, the Senate has now approved a motion to…drum roll please…debate the GOP tax reform bill.