FOR FRIDAY: (7/21) Lately the trade has 3-day weeks in the summer with Fridays and Mondays, being a virtual summer holiday. No reports on Friday so it may be a doggy day. The Monday before FOMC can be volatile and have a big range of profit-taking and the stocks are getting tired going into next week.
SEPT. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR FRIDAY: (7/21) Our morning buy lost about 6 points but the market still could do a divergent high up to 2477-2479.50 on Friday. 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.
Market tiring. The chance of a 20-point break early next week before the FOMC announcement is strong. NQ eyeing 5987-6000 and still room to be long there with key support at 5917 needing to hold. Daily chart projection now up to 6284 as greed for Netflix and Amazon has no bounds.
OVERALL: Market will need to take out 2440 to issue a stronger sell signal. Doing some larger 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: Sideways to higher Friday.
