FOR FRIDAY: (1/27) Cycles look more volatile with profit-taking setting in for Friday overall but not expecting any major reversals or seeing any reason to change our long stock/short gold/long dollar orientation. Lots of reports but not sure they’ll tell us much as what do old reports mean when you have all this Trump hope.
MARCH E-MINI S & P 500
TRADING RECOMMENDATION: Stand aside.
S&P ANALYSIS FOR FRIDAY: (1/27) Market held key support at 2289.50. Friday has a smaller chance for new highs to 2308.50 but still could happen early next week. Major support at 2284.75. Thinking that Friday is a sideways day and Sunday/Monday is higher but will make sure we’re not starting the 25-point correction earlier. Cash target of 2332 seems like it needs to complete by early Feb. before we get nervous.
OVERALL: Would think that a 4th-wave congestion of another 25 points will happen the week of Jan. 30-Feb. 2. Still should get a final push up to 2332 on cash.
NEAR TERM: Statistics around elections suggest a rally pausing about 2 weeks after inauguration and that fits with our cycles suggesting an early Feb. high. It’s possible that a key high for the winter could be in by Jan. 30 or Feb 6-10 and that highs into the week of Feb. 6-10 are secondary highs. We’re still open to a major pattern completion on cash at 2332 into early Feb. The last pullback 2nd wave on the weekly chart was a congestive fall over 10 weeks. If that is the case again, it could be that we have a 100-point congestive pullback into the week of April 9.
BIG PICTURE: (1/24) Patterns suggest two new highs to 2330 into early February before we really have to worry about a 100-point pullback that may happen into the spring. Feb. 9-March 30 may be the vulnerable period for that to happen but still could see 2380-2400 this year. If anything, any problems with China are likely to create big economic sneezes around the world and spillover problems, and Europe is a mess this year and contagion may cause problems the 2nd half of the year and possibly in February/March. Those of you look for a larger fall should focus on August-October but will be disappointed until then.
CYCLES OVERVIEW: Lower Friday; higher Monday.
