FOR TUESDAY: (4/18) While the markets went to the edges in terms of bounce and retracement, the writing on the wall suggests higher dollars into Thursday and it won’t take much to pull stocks up. Basically the market is rebalancing last week’s conditions and waiting on news. Our sense is that cycles into Friday-Tuesday of next week support battle conditions and guns will go off. We don’t see nuclear war but cycles are hitting the US and Trump very exactly that he will be aggressive. I suspect even though we want to dump our positions from last week, we may have to get back into them on Thursday.
S&P ANALYSIS FOR TUESDAY: (4/18) S & P had a quiet range on Sunday night and did not take out 2320. The strong rebound went about as much as it could to stay bearish and any more overnight will start projecting 2354.50. Likely to see at least 2341.50 or 2337.50 overnight so we may have to cover. Given that this market has a way of bounding over tall buildings, we won’t get too beared up until someone takes out the Plunge Protection Team. The market has not negated bearish signals and patterns and cycles are still on the edge this week but we have seen too many sucker-punches not to lean into this one anymore.
OVERALL: We have seen enough of this sucker-punch situations to not hold out hope for 2302. If we are going to get another push lower, we may see 2354.50. Without the close below 2318, the market still has some ways to make divergent highs to 2412-17 into May and that may not be off the table. The market thinks war is good for the economy usually. The surprise will come if China or Russia get more active in the fray.
BIG PICTURE: We have a bias for lower prices into April 19 and probably April 21 and if there is some upside resolution, it seems more likely to happen the week of April 24-28.
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 2150 is the most likely first downward target into June if the market can close below 2300.
CYCLES OVERVIEW: Bottoming/higher April 18-19.
