FOR WEDNESDAY: (1/11) Trump press conference may create new optimism based on some of the cycles running and seems safer to buy dips on the stock market overnight and on Wednesday. Gold needs a 3-day pullback and the dollar looks higher a few days and T-notes also. Oil has a transition day on Wednesday and then is a buy for 2-3 days.
MARCH E-MINI S & P 500
S&P ANALYSIS FOR WEDNESDAY: (1/11) S & P driving us crazy with minor breakouts and failures. Current pattern could allow 3 waves lower to 2256.75 and wouldn’t violate the uptrend and would love to buy 2257 as cycles look positive the next few days. If 2256 can hold today, then our larger pattern suggesting 2290-5 this week will still be on target. If 2253 comes out, we may be vulnerable to 2240 and a recovery the next few days would be a retracement.
OVERALL: More inclined to expect 2332 on cash complete probably by the first week of February. Strength in Nasdaq is suggesting that sector rotation to oversold techs that didn’t benefit from Trump bump as much are coming more alive now and very clear new highs there remind us not to get caught up about profit-taking just because 30 DOW stocks are at 20,000.
BIG PICTURE: (1/9) Patterns suggest two new highs to 2330 into early February before we really have to worry about a 100-point pullback that may happen into the spring. Feb. 9-March 30 may be the vulnerable period for that to happen but still could see 2380-2400 this year. If anything, any problems with China are likely to create big economic sneezes around the world and spillover problems, and Europe is a mess this year and contagion may cause problems the 2nd half of the year and possibly in February/March. For now, until 2332 on cash gets completed, we can continue to trend trade and buy dips.
WEEKLY CHART: (1/6) We still would expect new highs toward 2296 with additional resistance at 2330. It would seem that 5-wave up from the election low would be complete at 2330 and set up larger fall. Eventually we might get a 110-point correction from 2330 to 2220 and could take a few months which we need to confirm. Cycles in February seem troubling and March is often seasonally lower. That means that much of the current rally will be over in January. Still, it seems that 2380-2400 is very likely by June and then would be followed by a pullback to 2020 later in 2017 and 2520 might take until 2018 to happen.
MONTHLY CHART PATTERNS: 2420 or 2520 isn’t out of the question before this bull market ends and it takes a long time to turn an ocean liner around in so V-tops and crashes are not to be looked for and publications that steer you that direction are being too sensational.
