FOR THURSDAY: (5/25) Will the trade go flat before the long holiday weekend already on Thursday? It will thin but Thursday will be a better day to trade vs. Friday. We have the markets open most of the holiday weekend in electronic trading and have outlined cycles for the weekend. We think stocks will take profits after Thursday’s high and that the dollar will do short-covering from a new low on Thursday, and that will pull gold off after a secondary high on Thursday. Looks like crude will get stuck with sell the fact but we won’t play until OPEC is clear but it looks like a sale Friday-Tuesday of next week.
JUNE E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments
S&P ANALYSIS FOR THURSDAY: (5/25) Double-top in on the S & P but NQ making new highs so S & P should follow into Thursday to 2410 and eventually 2418. Upper daily chart resistance at 2429. Friday looks sideways to lower before the long weekend and Monday looks weak for electronic trading and Tuesday doesn’t look great. Hence Thursday is the best day to go long.
OVERALL: Bears who missed last week’s fall have to remember that funds and cheap money will come to the rescue—because that’s what they do. We feel that chills and spills may be happening from mid-June into October but we usually get complicated topping energy in late May and early June. We did get technical sell signals on Wednesday but that doesn’t mean the market has to go straight down right away again. We had thought about early June as a secondary high. We’re not quite ready to go for new highs but there are some patterns that can be read that way and nothing about this market will surprise us. So I think we have to forget about May 17 fall and see what develops on recoveries into next week.
LONGER TERM: (4/26) 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: Higher into Thursday; sideways Friday; lower into Sunday/Monday and Tuesday; higher into May 31.