(2/8) Still a sloshy week but API crude data is 2nd worst ever and will confirm a meltdown there. Still working on higher dollars into Friday and waiting to buy gold if we get a pullback.


S&P ANALYSIS FOR WEDNESDAY: (2/8) DOW and & NQ made new highs but S & P failed but didn’t break low enough to worry. Retest of 2294 last night isn’t telling us much. Computer models point to 2301.50 but taking out 2280 wouldn’t look good. Our sense is congestive topping action this week that will drive you crazy but in the end will push up to slight new highs, as NQ futures need at least 5191 (which came in) if not 5250 and the S & should get some kind of divergent high.

OVERALL: Given no pullback, we have to go with our original idea: S & P above 2287 is projecting 2295 with pullbacks to 2288.50 and 2285 probably holding on Sunday. First pattern completion within a few days to 2310 and then a pullback and then an extended target is up to 2317-8 into early next week or as late as Feb. 11. We’ve learned not to be a martyr about top-picking and while we’re getting close to a key weekly chart high, it’s not quite in yet. Still, 2310 will be hard to take out right away and we won’t rule out 2332 on cash to have an absolute completion.

WEEKLY CHART: Overall, we continue to look for topping action and a 100-point S & P correction over the next few months. Market a bit too oversold to jump into sales without a recovery. Given the atmosphere out there, we wonder if it will be more. Open to a major short into Feb. 26-28 but have to pick your spots carefully.

NEAR TERM: It’s possible that a key high for the winter could be in by Feb 6-10 and that highs into the week of Feb. 6-10 are secondary highs. We’re still open to a major pattern completion on cash at 2332 into early Feb but it’s probably down to 30% chance to happen and 2309 would be welcome. The last pullback 2nd wave on the weekly chart was a congestive fall over 10 weeks. If that is the case again, it could be that we have a 100-point congestive pullback into the week of April 9.

CYCLES OVERVIEW: Recovering Wednesday.

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