FOR TUESDAY: (5/23) We looked closely at cycles this week and not seeing anything to knock stocks down, and the trade is blowing off the latest scandal rumors and is more interested in increasing end of the month profits. We can’t be bearish but we are sure where we can get an entry. Dollar looks lower into Wednesday/Thursday and gold and silver higher and oil looks higher into June 3, and there is enough of a breakout that we can probably buy dips.

TRADING RECOMMENDATION: Wait for morning comments

S&P ANALYSIS FOR TUESDAY: (5/23) Break above 2390 projects 2402-4 and while we don’t favor new highs right away, this market often doesn’t take no for answer or go down. Breakout starting to project 2417 and in looking at cycles closely this week, not seeing anything to push it off the cliff until maybe some profit-taking on Friday. Support key at 2385 and 2390. Historically the market is often higher before Memorial Day. Cycles look positive again on Tuesday and also Wednesday. Chances are we’ll have to buy dips if we can get them and risk the trade below 2380-77.

OVERALL: Bears who missed last Wednesday’s fall have to remember that funds and cheap money will come to the rescue—because that’s what they do. We feel that chills and spills may be happening from mid-June into October but we usually get complicated topping energy in late May and early June. We did get technical sell signals on Wednesday but that doesn’t mean the market has to go straight down right away again. We had thought about early June as a secondary high. We’re not quite ready to go for new highs but there are some patterns that can be read that way and nothing about this market will surprise us. So I think we have to forget about Wednesday and see what develops on recoveries into next week.

There a patterns that would allow 2400 and then a push to 2340 and they are not out of the question but starting to lean for acceleration to new highs.

LONGER TERM: (4/26) Expecting that 2150 is the most likely first downward target into September/October if the market can close below 2300. May not get the sell signal until June.

CYCLES OVERVIEW: Higher into Wednesday and probably Thursday.

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