FOR MONDAY: (7/24) Lately the trade has 3-day weeks in the summer with Fridays and Mondays, being a virtual summer holiday. The Monday before FOMC can be volatile and have a big range of profit-taking on stocks and we do have a minor bias toward weakness on Monday if there’s anyone not at the beach.
SEPT. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR MONDAY: (7/24) The pattern before FOMC is usually down on Monday and then higher into the announcement. Key support at 2460. Minimum 3-wave patter to the downside was complete and possible we may see 2477.50-2479.50 and then a pullback. In any case, the market is probably going to take out 2480 eventually and reach up to 2493 and 2420 into the 2nd week of August. We’ll see how the market comes in on Monday to play it. We’re open to a 20-point correction from the highs to 2456.
NEAR TERM: Extended target up to 2499 now into the week of August 7-11. Daily chart pattern projecting 2542 now beyond our yearly target of 2520. Big picture may see the market holding up into the week of August 7-11.
OVERALL: Market will need to take out 2440 to issue a stronger sell signal. Doing some more work on longer-term patterns. At least 2493 or 2525 will come in by August high but pullbacks into October will probably hold 2325 so crash scenarios are just not there but a 10% correction into the fall will seem like a lot for a market that has only 1 elevator up button.
WEEKLY CHART: We are not thinking that the market will fall apart dramatically in July, but we doubt that there’s enough time and room for 2520 to come in this summer before things get complicated August-October. The market does seem like it will hold up into July 25. Seeing lots of congestive action and it may not fall apart until after August 9-11.
CYCLES OVERVIEW: Researching.