FOR THURSDAY: (2/22) Is Goldman playing games again, suggesting 5 rate hikes this year when the trade through the Minutes meant 3 rate hikes? Next key pivot point for most financials is Sunday, Feb. 25. We think it will be a stocks high, dollar high and gold low and crude high. Some of it will get retraced on Wednesday but that will set up entries for Sunday. Have to see how Europe and Asia react to the news but our cycles and patterns are fairly clear.
MARCH E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR THURSDAY: (2/22) Meat grinder action is a lot of fun if you can watch it full time. The morning ranges started well between 2606-2635 and then the FOMC minutes suggested that 4 rate hikes wouldn’t happen this year, and then Goldman thought that economy was hot enough for 5 rate hikes and the market tanked 50 points and is down in the night session. Charts look terrible but we can’t do anything until the morning. Cycles would suggest a bounce on Thursday but will it come from much lower with key support at 2671.50. Not convinced of excessive follow-through. Cash closed at 2701 and futures could easily go to 2680-2675 overnight and then rebound as if nothing happened.
Any early weakness this week doesn’t negate our premise for a 78% retracement up to 2802 on the current swing even if it takes until March 4 or longer. Some of our work had thought that the weakest cycles for the next 2 weeks were between Feb. 21-26 but Thursday does look like the best day to go up.
CYCLE SYNTHESIS: Higher Thursday/Friday/Sunday.
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