FOR MONDAY: (5/1) These news-related weekends are always precarious and we’re unable to do much about them unless we put out updates and new trades before the Sunday open. We’re assuming that the budget extension will pass for another week but that means another exciting weekend next week. We’re more concerned about Puerto Rico but think North Korea is more a problem in June and July. We can put in orders to buy and sell key numbers as outlined in our Friday morning service.
JUNE E-MINI S & P 500
TRADING RECOMMENDATION: Stand aside.
S&P ANALYSIS FOR MONDAY: (5/1) We exited at the close of Friday for breakeven but had chances to be in profits and take partial profits often. Possible that the market could go to 2374.50 on Sunday and then shoot up to 2418 but we’re not that optimistic that Monday-Wednesday of next week could shoot up to 2418. Another week of budget impasse probably means another week of congestion and waiting for resulsts. Still, one more slight new high would be enough for a minimum pattern completion on NQ and May 1-3 looks lower even if we get a big spurt on Sunday night.
Not seeing an inauspicious double-top and NQ still needs to reach at least 5650 and 5690 and maybe even 5740 before it has a completion. If Congress can handle Puerto Rico and the budget deficit, then the upper targets can come in probably on Sunday and one of those overnight spurts that are untradeable and just leave huge cash gaps to sell on Monday. As always, playing these things involves great risk with news disappointments. We did buy QLD for long NQ Thursday at the open, as it is the safest one for larger profit potential. Watch NQ taking out 5610 to lead to acceleration but it rallied almost 70 points yesterday so maybe too much to ask.
OVERALL: Much below 2370 and something deeper is possible. We often get a 30 point range of congestion before employment so a move to 2360 could easily happen and be followed by congestion between 2390-2360. Stocks in a transition/topping period the next few days and look like they will retrace 2-3 days next week. We’re still not looking for any major movement lower with topping action into mid-May.
WEEKLY CHART: Our new computer models are suggesting 2550 and that had been a target for 2018 but given the greed expansion, we should be patient with thinking this market will crash and burn. We have not seen it this year. Maybe 15% from June to October but a seasonal fall usually happens after mid-June. NQ has clearly needed new highs to 5670 and is stronger for a May high.
LONGER TERM: (4/26) Expecting a May high and a new NQ high unless NQ takes out 5200–and if that’s the case, we’ll get a divergent S & P high to maybe 2420. Expecting that 2150 is the most likely first downward target into September/October if the market can close below 2300. May not get the sell signal until June.
CYCLES OVERVIEW: Researching.
(Note: cycles for the US and world are complicated and tense into April 26 and could override normal stock market cycles.)
