FOR FRIDAY: (8/18) We knew to sell on Thursday but the market didn’t quite get as high as we would have liked and we missed it and had not thought it would break so hard. Cycles are very whippy the next 2-3 days. Violence and terrorism cycles are strong into late August and so while we hope Barcelona and Virginia are it, we fear there’s more coming. Harder to hold trades overnight. Will have to see what the morning brings.
SEPT. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR FRIDAY: (8/18) Missed the boat here. We thought we might have another day with option expiration happening before we had to be aggressively short and our attempt to sell 2466 this morning missed. Three waves down projects 2416.50 and then major support is at 2405 and 2397. Resistance overnight at 2431-32 but we have seen too many sucker punches to chase there. Some of our original work had a cycle low into Sunday and a recovery out of there. There’s a level of fatigue and exhaustion at work and it’s just leading to the exits. Whether the trade is upset about taking down confederate statues or terrorism in Barcelona, they don’t need much excuse when the market is so tired. NQ didn’t make a new low but should. There’s no place to put a stop except above 2441 if you have to be short.
WEEKLY CHART: There’s still a good possibility that based on patterns that the current fall is a 4th wave and that a new high to 2500-2520 would be possible in September. In the end we still see only 2300-2320 as a fall correction target with a multi-year high due into 2018. Market needs to hold 2400 into Monday and shoot out of there to open up that scenario. World violence cycles are strong the next few weeks and it won’t take much to unsettle this tired market.
CYCLES OVERVIEW: Volatile Friday; lower into Monday.
