FOR FRIDAY: (12/30) Not expecting much going into a quiet holiday weekend. If there are no violent shocks over the weekend, we do want to be long and stocks and the dollar next week and they should be oversold enough for better risk/rewards. Crude looks lower next week and gold and silver are topping on Friday and lower into next week.
MARCH E-MINI S & P 500
S&P ANALYSIS FOR FRIDAY: (12/30) Resistance up to 2249-50 and the chance for 2257 is small. Support down to 2235.50 and 2230. Not expecting much of anything. Any surprises over the weekend and max. downside might be 2219. We are not in a rush to take anything home to be bottom-pick especially after the surprises of Jan. 2016. We will suggest day-trading ideas in the morning probably selling the 2049 region but may get quiet ranges. . Yesterday, computers were allowing a bounce to 2257 and then a push to 2230.50. I suspect we will see the 2230 easily come in by the end of the year. The issue is whether a larger correction to 2218 will develop also once the New year opens. While new highs are coming in 2017, the issue is will we get some complicated topping wedge pattern which might allow a deeper correction in January. We are all still reeling from the January 2016 correction. We are doing more research on this and will report back.
OVERALL: We do see 2295-2300 as the next pattern completion to the upside into early January and if we have a surprise pullback the market would have to take out 2240 to issue a sell signal. Any surprises and a break below 2240 might start leading to 2230 and then 2219. Still it would not negate new highs into 2017.
BIG PICTURE: Patterns suggest two new highs to 2300 and 2330 into early January before we really have to worry about a 100-point pullback that may happen into the spring. Unless there’s something really wild coming, our focus for swing trades will be to buy a pullbacks.
WEEKLY CHART: Market has to hold 2240 and probably the market will not get close to that level. 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 in the cycles. That means that much of the fun of the current rally will be over soon. Daily cash charts starting to project 2300 and weekly charts 2335. We have a bias for higher prices from FOMC into Dec. 22 but we’re not clear how long it will take to do the last push up to 2330. Could be as late as Jan. 7.
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.
CYCLES OVERVIEW: Congestive profit-taking into Jan. 2.
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