Category: Financial Markets Update

FOR MONDAY: (4/10) These weekend breaks with saber-rattling are a bit unnerving, as Russia sends ships to the area and rhetoric flies. Cycles into April 13-14 do have more war/aggressive energy than the following week so getting through this week will be important but an underlying peace cycle may prevent anything series through late May. We have always worried more about war and violence July and August and that may be the more serious time period. Despite a decent finish on Friday, stocks look mostly lower into Wednesday of next week and it would not take much to trigger a weekly chart top, although we think NQ still could do a divergent high in May. The dollar should top out by Friday and be lower next week and gold and silver look lower next week and also T-notes which finally looked like they put in a reversal. These big-event days with extended ranges usually turn into key points for the month. If the news is volatile over the weekend, we will put out an update on Sunday night if we can but usually it’s too difficult to tell until Europe opens in the Middle of the night.

JUNE E-MINI S & P 500
SWING TRADING RECOMMENDATION: Sell June e-mini S & P at 2359 and 2364 with a 2368.50 stop.

S&P ANALYSIS FOR MONDAY: (4/10) We moved stops to breakeven and got stopped but had suggested partial profits a number of times and the market never took out our original stop into the close. We have a bias for lower prices into Wednesday, but won’t rule out going to 2364-2366 on Sunday night if there is some calm and sanity in the world. The failure to break 2340 on a closing basis didn’t confirm a weekly chart top and even if we get to projections to 2325 or 2318 quickly, we could recover in a congested manner. We do want to get short but may not get the chance.

OVERALL: We favor a fall to 2318 with a first cycle low into April 12 to complete a 3-3-5 pattern. Because cycles are volatile into Sunday and news continues to be on the edge, you have to favor shorts but will put out orders higher if we can get.

BIG PICTURE: The week before tax returns is often bearish and some sell stocks to pay for taxes and seasonals seem lower before taxes are due. We have a bias for lower prices next week and if the market remains congestive and cannot drop, then they may take the market up into next Friday.

LONGER TERM: (3/27) Still can’t officially say we have a weekly chart sell signal until 2300 comes out on a closing basis. It may be a while before we know if a weekly chart top is in. Expecting a May high and a new NQ high unless NQ takes out 5200–and if that’s the case, we’ll get a divergent S & P high to maybe 2420. Expecting that 2050 is possible into October for a 15% correction and cycle low and if the market closes under 2300, we would see 2200. Too early in the game to get too beared up but you can favor shorts into the week of April 2-6 and watch pattern completions. Still have to pick your spots carefully.

CYCLES OVERVIEW: Lower into April 12; higher into April 14.

FOR THURSDAY: (4/6) We told you this would be a wild week and so far it’s living up to its billing and not over yet and should get wilder as we move into Friday. At this point we had some clear reversals on Wednesday but now need to get 62% retracements of them to get in better.Continue reading

FOR WEDNESDAY: (4/5) Trade waiting on FOMC minutes. Stocks and gold still look higher and crude isn’t done until 5150 comes in and dollar needs 101. There should be a climax in pattern completions within a few days and the trick will be when will China news come out of the meeting on Friday and will markets be closed by then?Continue reading

FOR TUESDAY: (4/4) Employment-report week is often a congestive mess with wild swings and congestion triangle patterns. It makes trading erratic and tricky and you have to take the money quickly on short swings and jaunts. We don’t want to take too much home overnight with crazy cycles. Today’s first surprise was the St. Petersburg’s metro bomb and while the news had downplayed it, the smoking gun was found on the leaks and it was President Obama’s own Susan Rice. The media is more interested in making up Putin stories than covering a real scandal. Our world has changed so much since Walter Cronkite.

BACKGROUND NOISE CONTINUING: We’re moving into a potentially intense week politically and could spill over into the markets. On the calendar is a Trump meeting with China, and we have to think that N. Korean games could heat up this week. Spring cycles suggest a repeat of the June cycle that led to the trigger of Brexit and that cycle kicks in the week of April 3. Britain is invoking Article 50 on March 29, which will lead to a 2-year transition. This cycle also suggests more revolutionary energy for France on May 7 and eventually Italy. We last saw this cycle around Brexit and it created massive moves in the market, so the week of April 3 could also produce something like that. That in connection with an intense fear cycle could lead to a major turn if there’s a trigger. There is also the start of a 7-year cycle kicking from April 2017-2024 that will increase military and technological development, and it has an 84-year synodic period. It signals unpredictable, sudden occurrences, such as May 2010’s “flash crash,” when the Dow dropped 1,000 points in 5 minutes, wiping out many small investors. This cycle is connected electricity, shock, computers and inventiveness and social activism. It will be running for the next 7 years.

All of this puts us on alert not to take a lot of positions home unless you are clear on patterns and cycles and can manage risk.

FOR MONDAY: (4/3) We’re moving into a potentially intense week politically and could spill over into the markets. On the calendar is a Trump meeting with China, and we have to think that N. Korean games could heat up this week. Spring cycles suggest a repeat of the June cycle that led to the trigger of Brexit and that cycle kicks in the week of April 3. Britain is invoking Article 50 on March 29, which will lead to a 2-year transition. This cycle also suggests more revolutionary energy for France on May 7 and eventually Italy. We last saw this cycle around Brexit and it created massive moves in the market, so the week of April 3 could also produce something like that. That in connection with an intense fear cycle could lead to a major turn if there’s a trigger. There is also the start of a 7-year cycle kicking from April 2017-2024 that will increase military and technological development, and it has an 84-year synodic period. It signals unpredictable, sudden occurrences, such as May 2010’s “flash crash,” when the Dow dropped 1,000 points in 5 minutes, wiping out many small investors. This cycle is connected electricity, shock, computers and inventiveness and social activism. It will be running for the next 7 years.

All of this puts us on alert not to take a lot of positions home unless you are clear on patterns and cycles and can manage risk. For now, we’re seeing higher dollars and lower gold for Monday and higher stocks for Monday and higher crude.

FOR FRIDAY: (3/31) Many of our patterns failed to manifest for secondary highs as month-end profit-taking on gold and T-notes and long euros continued to hit early. Most of the cycles seem strong on Friday and we would need really bearish news to get a major breakdown, although we always think of profit-taking setting in for stocks at month and quarter end. Will see where the market is for the morning.Continue reading

FOR THURSDAY: (3/30) A string of inside days didn’t reveal much. We continue to suggest cycle highs for gold on Thursday and cycle lows for the dollar and stocks, and how much they fall will be key. Month-end position squaring by funds will hit by Friday and be a factor. We do want to sell gold and silver in case they come off sharply for the end of the month.Continue reading

FOR WEDNESDAY: (3/29) Some markets are looking like they’re reversing but key numbers we discussed on Monday night have come in and now the weak cycles for stocks have to kick in the next few days to support all the positions we anticipate. We’ll wait for the morning to take new position. If we get weak retracements, then the market will start being more convincing for gold bugs and bears in the stock market.Continue reading

FOR TUESDAY: (3/28) Continued 2-day retracement likely for all overdone markets and then new thrusts into Wednesday/Thursday. S & P patterns are fairly clear as are T-notes. We still like the short side of crude if we see a big enough bounce. Gold may have a last buy setting up but minimum target is in.Continue reading

(3/27) With health care bill dead for now and perhaps moving to the Wall and border issue next, will the trade just ignore the failure? Cycles for stocks are still pretty weak next week and probably the following week so our guess is that things will get unnerved. Still, with just slight new pattern completions on a lot of markets, larger retracements need to happen. Markets are very volatile for the next few sessions so expect wild moves and unexpected news so be careful!Continue reading