FOR THURSDAY: (12/15) Bank of England results will be by morning and no rate hike there will not be helpful for US/GBP cross rates. Stocks still need to congest a bit lower before the next buy sets up. Gold and the dollar could be done very quickly and we could be setting up for end-of-the-year congestion and waiting on the Electoral College and the Inauguration.
MARCH E-MINI S & P 500
S&P ANALYSIS FOR THURSDAY (12/15) Market completed the slight new high to 2273 and that sets up the pullback to 2236 now. The previous 4th wave occurred over 4 sessions so we wonder if this one will take its time waiting for the Electoral College results on Monday. Deeper support is at 2231 and 2216 if it gets ugly out there with Electoral College voters changing their minds. Support overnight at 2238 and resistance at 2260. Market could be a big of a congestive mess but we are probably ok buying early but will wait for the morning before putting orders in.
OVERALL: Patterns suggest a pullback to 2236 and then two new highs to 2300 and 2330 before we really have to worry about a 100-point pullback which may happen into the spring.
Our original work had suggested complications around the election in its aftermath and while the recounts have been a non-event, will the CIA attempts at a soft-coup have more problematic. Unless there is something really wild coming, our focus for swing trades will be to buy a pullback to the 2236-37 region which may take a few days to come in. If the market breaks out to new highs then we will not get a chance.
WEEKLY CHART: Five waves up from the 2179 Italian vote is complete and a 34-point pullback would have to hold 2130 on March futures. That still would require a new high by Dec. 22 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 in the cycles. That means that much of the fun of the current rally will be over soon. Daily cash charts starting to project 2300 and weekly charts 2335. We have a bias for higher prices from FOMC into Dec. 22 but we’re not clear how long it will take to do the last push up to 2330. Could be as late as Jan. 7.
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: Retracing lower into Thursday.
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