FOR MONDAY: (8/7) Mondays continue to be doggy with a long holiday weekend for many. We have completed research for the next 3 months and published our new Fortucast Financial Visions issue, and some of our thoughts are included below. This is a transition week for stocks and we see a cycle low into Aug. 21 but it still may not be the final low of the summer. Dollar and gold need to retrace overdone conditions from the past week. T-notes probably had a game-changer report and we can be short most of the month.
SEPT. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR MONDAY: (8/7) Quiet day and continued action suggests market is tiring. We could see this market break on Sunday night into early Monday and we won’t rule out 2455-53 if there’s any ugly news. Lately, Mondays have been quiet. Resistance up to 2480.50. Overall, this market will not be a sale until after Aug. 15 so without a big break today, the chances of new highs are increasing. This market is running out of time.
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: Topping Monday; lower into Tuesday; congestive topping into Aug. 12-15; lower into Aug. 21.