FOR FRIDAY: (1/13) Banking stocks earnings will be a focus. Cycles look weak and we’re very open to selling stocks on Friday and holding into Sunday. Will the trade be selling before inauguration waiting on riots in DC? Running out of time for new highs for stocks. Dollar close to key 3-wave pullback at 100.44 and gold almost done at 1225-30.
MARCH E-MINI S & P 500
S&P ANALYSIS FOR FRIDAY: (1/13) Whippy day did hit everyone hard. Looks like we’ll see 2270-2 again before the market comes off and now we’re not that sure about 2237-40 holding. Daily chart pattern could be a choppy push lower to 2225. Anxiety cycle hanging over the market and should increase in intensity into Feb. 6. There are other cycles countering it but will the March on Washington of 750,000 strong upend the country?
Is the Honeymoon over with Trump? The reality is hitting that what may be good for the populace with returning jobs and lower drug costs may not translate into higher profits for corporations, and that’s the Big Elephant in the room that Wall Street is sensing. We would like to sell this market on Friday and hold into Sunday.
OVERALL: With the break of 2250, we do not understand the patterns at work. We have hoped for at least 1-2 more new highs into early February, as market could pull back into March but cycles are bit too crazy for about 3 weeks from Jan. 16-Feb 6 and we wonder if the market can climb a wall of worry. We still favor the pattern suggest a 100-point decline into March but will get 1-2 more new highs first? If not a larger 4th-wave pullback to 2183 on futures may have started.
WEEKLY CHART: More inclined to expect 2332 on cash complete probably by the first week of February. Strength in Nasdaq is suggesting that sector rotation to oversold techs that didn’t benefit from Trump bump as much are coming more alive now, and very clear new highs there remind us not to get caught up about profit-taking just because 30 DOW stocks are at 20,000.
BIG PICTURE: (1/9) 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. For now, until 2332 on cash gets completed, we can continue to trend trade and buy dips.
WEEKLY CHART: (1/6) We still would expect new highs toward 2296 with additional resistance at 2330. It would seem that 5-wave up from the election low would be complete at 2330 and set up larger fall. Eventually we might get a 110-point correction from 2330 to 2220 and could take a few months which we need to confirm. Cycles in February seem troubling and March is often seasonally lower. That means that much of the current rally will be over in January. Still, it seems that 2380-2400 is very likely by June and then would be followed by a pullback to 2020 later in 2017 and 2520 might take until 2018 to happen.
MONTHLY CHART PATTERNS: 2420 or 2520 isn’t out of the question before this bull market ends and it takes a long time to turn an ocean liner around in so V-tops and crashes are not to be looked for and publications that steer you that direction are being too sensational.
CYCLES OVERVIEW: Lower Friday; lower into Sunday; higher into Jan 17; lower into Jan. 18; higher Jan. 19; lower into Jan. 20; lower into Jan. 23.