FOR MONDAY: (1/9) It doesn’t seem like the employment report meant a whole lot or was a deal killer and if anything, we’re getting disappointing numbers for a Christmas employment month. Reports of disappointing sales by Kohls and Macys and closing down of 150 K-Mart/Sears stores is a reminder that this recovery is all smoke and mirrors. Still, hope cycles for stocks may keep it pushing up into Thursday and that may allow a dollar recovery. Larger patterns aren’t definitively done enough for us give up on Euro 107.00 cash this week. Gold and silver are also looking weaker this week.
MARCH E-MINI S & P 500
S&P ANALYSIS FOR MONDAY: (1/9) The push above 2273 confirmed the friendly pattern for 2295 before we get a pullback. Short-term support at 2269.50 and 2266.50 with much under 2264 threatening a minor breakdown. Resistance is strong at 2279-80 and 2289. Cycles look friendly on Monday and assuming China doesn’t lay an egg, we should see 5 waves up to at least 2292.50. The acceleration triggers a possible breakout here. We suspect that 2292-95 will be in with in a few days and the risk for a breakdown is low. We have to throw out the pattern that would allow a pullback to 2165.
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: (1/6) 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. Cycles in February seem troubling and March is often seasonally lower. That means that much of the current rally will be over in January. Still, it seems that 2380-2400 is very likely by June and then would be followed by a pullback to 2020 later in 2017 and 2520 might take until 2018 to happen.
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: Higher Monday; topping/lower Tuesday.