Market Observations for the Coming Week: The SPX gapped down at the open Monday into the New Moon Timing Window, tested the 50-day MA, and then rallied back impulsively into Thursdays' close. The SPX finished an EW a-b-c correction from the 3/1 high early Monday and market breadth bullishly diverged during the C-Wave down - this is BULLISH. We're looking for IRA contributions to drive the SPX and DJIA to new highs by 4/15 (Tax Day).
3/30/17 (Commentary for Thursday) Led by energy stocks and financials, the SPX finished an EW 5-wave advance into late Thursday and the NDX made a new all-time high. The daily volume on QQQ and SPY was low (just short covering?) and may indicate a pullback into the last trading day of the month on Friday. The oil stocks and financial stocks were particularly strong Thursday - we plan to buy dips in oil stocks and financials stocks early Friday - we are looking for a test of the market highs going into 4/15 (Tax Day) as IRA contributions flow in for the year. Crude oil continued to rally impulsively into Thursday's close - we may have started a substantial bounce. We plan to buy XOM or XLE on dips. Gold peaked on the New Moon and continues to trace out a 3-wave correction on the hourly chart - the ideal setup would be for the metals to pullback while the gold stocks show relative strength into 4/4, the 55-day Fibonacci step out from the 2/8 high in the GDX. The Dollar Index may have finished an EW 5-wave rally from early Monday and looks ready for a pullback.
Big Picture on Stocks (UPDATED) - The SPX and DJIA finished their EW a-b-c correction from 3/1 on Monday in the New Moon Timing Window. We are looking for all-time highs by April 15 in the SPX.
Big Picture on PMs (UPDATED) - We got an important trading low in gold on 3/10 in the Full Moon Timing Window and finished an EW 5-wave rally into Monday's New Moon, but weakness in gold stocks argues for a pullback into 4/4, the 55-day Fibonacci step out from the 2/8 GDX high - Patience.
- Stocks - The SPX made a 5-wave advance from early Monday on the back of oil stocks and financials - we plan to buy dips in QQQ, BAC and XLE.
- Gold - Gold is declining in 3-waves from the New Moon high and we are targeting 4/4 for a tradable low - we want to see gold and silver stocks show relative strength into 4/4.
- Silver – The SIL/SLV ratio (silver stocks/silver metal) looks weak here and forecasts a pullback in the PM sector into 4/4.
- Crude Oil - Crude oil continued to rally impulsively into Thursday's close on the hourly chart - we plan to buy oil stocks on dips.
- Bonds - Like gold, US bonds are just giving us just a 3-wave into Thursday's close - this argues for a small pullback in the stock market on Friday.
- Dollar Index – The $DXY finished an EW 5-wave rally into Thursday's close - we're looking for a small pullback on Friday.
TURNING POINT DAY
The turn window for this week is 3/27-3/28.