(3/20) We looked at cycles for Sunday and they seem more negative than positive overall if people want to be selling. That might mean weaker dollars and higher metals and lower stocks from what we could tell. Cycles turn more positive after 9 am on Monday so whatever negative impact comes, it could be retraced on Monday. We have had a bias toward lower metals and higher dollars much of next week but Sunday/Monday is still a transition time. With no major reports if G-20 or Korea don’t spur any movement, then it could also be a typical “dud” day.
JUNE E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR MONDAY: (3/20) Not sure we learned anything more than the market stalled at a 62% retracement of last week’s fall. Most likely on Sunday we’ll see a C-wave lower to 2366.50 and if that holds, we still could start back up. Lower parabolic and moving average support at 2359.50 is also possible. Until 2350 comes out, we have to assume that the market will go up to 2394 or higher. NQ has been keeping us out of trouble lately and it has to hold 5400 and then still could make new highs to 5477 and 5500 and 5550.
If the market doesn’t breakdown on Friday, then 2396 could happen with a better chance on Sunday night, as Monday is looking weaker. We’re starting to sense that the market could hold up until March 23 if it can’t break below 2355 soon. Given that the bulls tend to win, there’s nothing to get beared up about without huge news over the weekend out of G-20 or Korea.
OVERALL: The new highs on NQ confirmed that what we saw last week was a 4th-wave low and two more high. The move above 2385 after the FOMC is indicative of that. The time window for this is short is probably now past March 23 when we think the market is more vulnerable. This week’s low was enough to satisfy that it was a minor 4th-wave pullback and that new highs can come into next week.
BIG PICTURE: If the market doesn’t take off to new highs to 2417 into March 23, then we do favor 2321 on cash and have to be short in case more manifests. Seasonally the market is often lower the end of March. The 2520 projection for May is very clearly in the patterns now and wondering if it will happen. We see no point in top-picking.
LONGER TERM: (2/15) Still thinking an early April low and then still new highs this year and not thinking crash this year to 2520 and maybe a 10% correction between August-October and 20% If things seem more dire with US rioting and a deeper European collapse. Market seems lower from mid-May into late June and probably into July.
CYCLES OVERVIEW: Lower Sunday; recovering early Monday; higher into Thursday March 23; lower March 24 into March 26-27.
