FOR WEDNESDAY: (1/25) The Infrastructure Bill that Democrats are dangling in front of Trump has everyone thinking raw materials and industry will benefit. Still a long way away before that passes. In the end, it’s a step in the right direction instead of spending money on useless wars to overthrow regimes and advance the military industrial complex. Stocks staged a minor breakout but not the dollar, and other markets were a bit muddled. Getting 1 week away from FOMC but not sure it matters much this time.
MARCH E-MINI S & P 500
S&P ANALYSIS FOR WEDNESDAY: (1/25) Push up to 2280 confirms that the 4th-wave congestion triangle finished a bit early and it’s clearer on the cash charts. Cash may have finished the congestion pattern with short-term targets at 2290 and 2302, which would take futures quickly up to 2286 and 2298.
OVERALL: 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 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 agai, 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: Recovering Wednesday; higher Thursday; lower Thursday; higher Monday.
