FOR THURSDAY: (2/1) Hoping for a pause on Thursday. We’re completing new cycle research and have found a key cycle into Sunday that will impact the dollar negatively and it’s supportive for stocks and crude oil.
MARCH E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR THURSDAY: (2/1) The S & P got close to the very key support at 2810 and is now over 20 points above there, with key resistance again at 2839.50. Once we take out 2842, I suspect that a larger retracement will start. The tone of the market with higher rates coming and the inability to recover this week is disturbing but first of the month buying may come in even before the employment data. A 62% retracement would go to 2853.75. If the market struggles the next few days, we’ll stay open next week to another push lower and some cycles could allow a push down into Feb. 9.
OVERALL: As far as we can tell a 70-80 point pullback would just be a 4th wave matching the March correction or the August correction, and in the worst-case scenario a larger 4th wave would hold 2744. We have to look closely at cycles in February to see if something bigger could happen like that.
CYCLE SYNTHESIS: Generally higher into Friday.
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