Market Observations for the Coming Week: The SPX made a high on 3/1 between the intense 2/27-2/28 New Moon/solar eclipse turn window and the potent 3/3-3/6 geo-cosmic turn window and we have now declined in an EW 5-wave pattern on the hourly for the ES into 3/7 - this is the QUIETEST EW 5-waves down on the hourly that I've ever seen ... DANGER AHEAD ? The NDX made a possible low-volume B-Wave test of the 3/1 high after the NFP jobs report on Friday/Monday - we may have started a C-Wave down on Tuesday.
3/14/17 (Commentary for Tuesday) The market rolled over today and may have started the C-Wave down off the 3/1 high in the SPX and NDX. The potential slow down of the Trump agenda with the complexities of the AHCA act is a threat to the market here. The NDX made a low-volume B-Wave test of the 3/1 high on Friday/Monday and we got a Negative Volume Reversal Day in the QQQ on Tuesday - short-term bearish. The SPX appears to have started a C-Wave down into the 3/15 FOMC rate hike decision. Crude oil made a lower low Tuesday but rallied into the close - we're inclined to buy dips in the oil stocks after the predicted 3/15 rate hike. The VIX took out last week's high and may be poised for another leg higher - this market is overdue a healthy "fear spike". Overall though, this is a QUIET and COMPLACENT market and is vulnerable to a sharp leg down after the FOMC rate hike. The release of the Republican health care proposal to replace Obama Care is stirring up some opposition especially in the realm of excessive high-income tax deductions and too meager low-income tax credits - it would not be surprising to see some market angst over the slowdown in the Trump agenda. We have seen warning signs of an intermediate stock market top: the much hyped SNAP IPO launched 3/9 and the dramatic cut in trading commissions by Schwab, Fidelity and TD Ameritrade. Our tactic now is to hold some IWM and QQQ puts and some UVXY calls going into the 3/15 FOMC rate hike decision with the idea that we could catch a Wave 3 of a C-Wave down in the SPX afterwards. The market TOOK BACK its sell signal on our $TICK indicator Tuesday - we broke back above the "zero line" on the 15-period simple moving average on the hourly $TICK - this argues that the SPX is not quite ready for a decline. The GDX made a trading low on Friday and spiked into a early high on the 34-day Fibonacci step out on Tuesday - we are expecting an important low in the PM sector by 3/15-3/17. We still plan to buy dips in oil stocks, gold stocks and biotech shares on any downside volatility into 3/17. The Dollar Index is coiling to take out 102.27 by Wednesday's FOMC rate hike decision, but the Euro may have made an important low at 104.98.
Big Picture on Stocks (UPDATED) - We may have seen an important intermediate top on the SPX on 3/1 - the NDX made a low-volume B-Wave test of the 3/1 high on Friday/Monday after the NFP jobs report - we may have started a C-Wave down Tuesday in the NDX.
Big Picture on PMs (UPDATED) - We're looking for an important turn in the 3/14-3/15 turn window which includes the 34-day Fibonacci step out from 2/08 for the GDX, and a potential FOMC rate hike on 3/15 - we're expecting an important low by 3/15-3/17.
- Stocks - The SPX rolled over in a Wave C down from 3/1 today Tuesday - the market is declining into the 3/15 FOMC rate hike decision. We're holding some SPY, QQQ puts and UVXY calls.
- Gold - Gold declined into Friday's NFP jobs report and then bounced into the 3/12-3/13 Full Moon Timing Window - we're looking for a test of $1180 after the 3/15 FOMC rate hike action.
- Silver – Silver declined into the NFP jobs report Friday and then bounced into the 3/12-3/13 Full Moon Timing Window - we're looking for an important low by 3/15-3/17.
- Crude Oil - Crude oil made another leg down into early Tuesday before a lower than expected inventories number gave us a bounce into the close - we're looking to buy dips in CVX, COP and SLB after the FOMC rate hike decision.
- Bonds - US bonds made a low early Tuesday and then rallied hard as the SPX sold off - we like TLT calls on dips.
- Dollar Index – We're still looking for another spike above 102.27 into the 3/15 FOMC rate hike decision but the Euro may have made an important intermediate low at 104.98.
TURNING POINT DAY
The turn window for this week is 3/14-3/15 and includes the 3/15 rate hike decision.