FOR TUESDAY: (8/8) Mondays rarely tell us much, as everyone is still at the beach but they do start coming back by Monday night so we could complete some patterns by the morning. We have a lot of mixed cycles with topping stocks, lower bonds, higher dollars and retracing gold this week.
SEPT. E-MINI S & P 500
SWING TRADING RECOMMENDATION: Hold Sept. e-mini S & P shorts from 2476.75 with a 2483.25 stop.
S & P ANALYSIS FOR TUESDAY: (8/8) You didn’t miss much if you took Monday off. Quiet day and continued action suggests market is tiring. We could see this market break we won’t rule out 2455-53 if there’s any ugly news. Resistance up to 2480.50. Overall this market won’t be a major sale until after Aug. 15 but we have seen these markets top out early. If we don’t get much of a break the next few days, we may cover and expect anther push up.
Thinking quiet ranges again with a downward bias.
SHORT-TERM: Possible that the summer high came in on July 27 but the DOW is still making new highs, as sector rotation is happening as funds look for something to buy. We’re in the process of doing a series of secondary highs that should complete by Aug. 15 and then start a break first to 2420 and more likely to 2320 into October or early November. Chances for new highs are possible if 2520 into September if there’s some bizarre good news like passing health care. Week of Aug.15-22 seems lower. Looking at cycles and patterns, it could be that the S & P does a 4th-wave minor fall of 60 points toward 2420 into Aug. 21 and then recovers out of there into September we could still get to 2520, and that the biggest break to 2320 might happen in October and into early November. We have to see the context and see how bad geocosmic events are going into Aug. 21.
PATTERNS: We’re not closed to new highs to 2485 or 2494, as we have seen these 4th wave fake-outs happen before. Daily chart patterns still point to 2541. The greed and smart money will keep buying. If we hold 2450 and make a divergent high to 2493 by August 15th, we may have a move ideal price and time situation.
BREAKDOWN POINT: 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. New high toward May 2018 should go to at least 2560-80.
CYCLES OVERVIEW: Lower into Tuesday; congestive topping into Aug. 12-15; lower into Aug. 21.
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