FOR THURSDAY: (10/19) Chances are nothing will happen with N. Korea but it’s still pretty dicey and Thursday offers some chance for volatility. We’re trading off of patterns and they have a temporary completion at 2562 on the S & P. Gold and silver issued a major sell signal and crude hold up until Oct. 22.
DEC. E-MINI S & P 500
S & P ANALYSIS FOR THURSDAY: (10/19) It’s taken a week to get up to 2562, which was a key number we had last week, and yesterday we had 6131 on NQ. While additional resistance is up to 2567 and 2570 on the S & P, this is a place finally of pattern completion. Without a bad news trigger, not sure we can count on our 20-30 point correction but it’s still there in the patterns. Will stick with our patterns and cycles and see what happens but we may move stops down later.
NEAR TERM: The market continues to show signs of a distribution top and continues to tire and has to be nervous before North Korea and Spain news. We don’t like cycle but the market has a one way mission so it’s rather bold to be top-picking looking for 20 points. It may come on some bad news headlines and will get gobbled up again.
OVERALL: Running out of time for this market to go higher without a 20- or 30-point break. The telescoping nature of the patterns might suggest 2-3 more new highs to get the market up to 2580-2600. While cycles are very dicey the next few weeks, without a major international crisis with Iran or Korea to rattle the markets, I suspect the trade will continue to do what it does.
LONGER-TERM: While we should get a 20- or 30-point pullback, the chance for something bigger may not come until 2580-2600 comes in. Cycles are intense in the world but the market continues to ignore them. At best if we are to get a pullback to 2320, it may come from 2600 and it may take more time to manifest with December being vulnerable with the budget deficit.
CYCLES OVERVIEW: Lower Thursday; higher Friday; lower Monday/Tuesday.