FOR WEDNESDAY: (4/5) Trade waiting on FOMC minutes. Stocks and gold still look higher and crude isn’t done until 5150 comes in and dollar needs 101. There should be a climax in pattern completions within a few days and the trick will be when will China news come out of the meeting on Friday and will markets be closed by then?
JUNE E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR WEDNESDAY: (4/5) Resistance up to 2362.50 with support at 2355. We have had a bias for a cycle high into Thursday and the market didn’t fall as far as we had expected. Trade may be waiting for clues from FOMC minutes at 1 pm but not much there usually. Cycles are complicated going into Sunday but 2380 has better chance than a huge break. China is a wild card as are the surprise cycle repeating, which we last saw with Brexit when we had huge market moves in a few days. In the end, rallies will continue to be sold so we can scale in position shorts on rallies and that we should have a negative fall this week. Friday is the peak of the surprise cycle, which could mean Trump putting his foot in his mouth big time and hurting relationships with China or pulling off another Trump surprise and “making the deal.”
OVERALL: Often the week of employment report is a wild congestive mess. The market didn’t fall enough to negate a complicated congestion triangle this week. While the market seems lower after April 12, it’s unclear if there’s enough breakdown energy to make the bears happy. In the end with cycle lows into October and topping action, we can use strength to exit length and get short, but we can’t count on immediate profit gratification until maybe June. A congestive topping mess with new highs on NQ is the most likely scenario.
BIG PICTURE: Have to assume that the 80-point pullback was just a 4th wave and yet cycles in April are congestive enough that it may be a while before we can rule out the slight new high to 2417 to complete everything. As always, give the bulls the benefit of the doubt. We still expect a 15% pullback into the fall but it should start from higher levels.
LONGER TERM: (3/27) Still can’t officially say we have a weekly chart sell signal until 2300 comes out on a closing basis. It may be a while before we know if a weekly chart top is in. 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 2050 is possible into October for a 15% correction and cycle low and if the market closes under 2300, we would see 2200. Too early in the game to get too beared up but you can favor shorts into the week of April 2-6 and watch pattern completions. Still have to pick your spots carefully.
CYCLES OVERVIEW: Lower April 5; higher April 6; volatile April 7; lower into April 12; higher into April 14.
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