FOR TUESDAY: (5/16) Well, stocks survived a long-range missile test by North Korean over the weekend and just really cared about another false promise from OPEC. We’re not seeing this market run out of steam until the end of the week so we assume that it will go higher. Our cycle work is at odds with technicals this week. We often don’t pay much attention to Mondays as they are often low-volume. We have to see if the minor breakouts on silver and the Euro continue and if not our original work will be on schedule. We expect at least a retrace of Monday’s profits for most of these markets.
JUNE E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR TUESDAY: (5/16) While we do expect a breakout to 2417 this week, we would rather buy from better levels. That would look more ideally like 2390. We will give the market a chance to break lower but not sure it will happen on Tuesday but it may have a better chance than rather than the rest of the week.
While our long-term target was 5707 on NQ and has come in within ½ cent, it could extended to 5735 or 5782.
OVERALL: Daily stochastics have rolled over and 2394 isn’t likely to come out. Still not convinced that anything dramatic to the downside will happen and market still looks like it could hold up next week. If it hits 5700-5, then a short in SP may set up.
WEEKLY CHART: Maybe a 15% fall from June to October but a seasonal drop usually happens after mid-June. NQ has clearly needed new highs to 5707 and probably more before the S & P will cave in.
LONGER TERM: (4/26) Expecting a May high and a new NQ high unless NQ takes out 5400–and if that’s the case, we’ll get a divergent S & P high to maybe 2420. Expecting that 2150 is the most likely first downward target into September/October if the market can close below 2300. May not get the sell signal until June.
CYCLES OVERVIEW: Volatile Monday/Tuesday; higher into May 19.