FOR MONDAY: (10/22) Cycles look rather bearish next week for stocks and confidence will quickly erode if any bad news hits. Saber-rattling with Russia over the weekend isn’t going to spark any buying so it’s just a matter of finding a good spot for short stocks. Dollar looks lower this week but we need a divergent high, and same with a divergent low for gold to get long on the week.
DEC. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR MONDAY: (10/22) Our ETF Timer had suggested getting into SDS on rallies to 2800-1 on Friday, which is perfect but we did not top-pick futures and the weak close leaves us rather vulnerable. We have a bias toward weak cycles this week and will have to look for an entry on Monday. Floor resistance at 2776.50 would be the weakest bounce we would have to chase. Cash and futures closed even. The larger cycle is weaker into Tuesday and Wednesday and much of next week. We’ll give the market a chance to recover on Monday, as often it won’t take a stand at the first of the week. Not too much dire news over the weekend but pulling out of the nuclear accord with Russia is a bit unsettling.
CYCLES OVERVIEW: Mixed Monday; lower into Tuesday.