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 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 - we are looking for a C-Wave down on Monday/Tuesday
3/13/17 (Commentary for Monday) The market slowed to a crawl on Monday in anticipation of the FOMC rate hike decision on 3/15 - the Ides of March. The potential slow down of the Trump agenda with the complexities of the AHCA act could be a threat to the market here. The NDX may have made a low-volume B-Wave test of the 3/1 high on Friday but we held up on Monday. The C-Wave down on the SPX that we were looking early this week may not happen until after the 3/15 FOMC rate hike decision. Crude oil is making a sideways bounce after the 3/12-3/13 Full Moon Timing Window but still looks weak - we're inclined to buy dips in the oil stocks after the predicted 3/15 rate hike. The VIX declined on Monday as the SPX stubbornly held up. 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 high-income tax deductions and low-income tax credits - it would not be surprising to see political headwinds impact the market this week. We have seen warning signs of an intermediate stock market top: the much hyped SNAP IPO launched Thursday 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 is giving us a sell signal on our $TICK indicator - we got a decisive break of the "zero line" on the 15-period simple moving average on the hourly $TICK - but the SPX continued to hold up on Monday. The GDX made a trading low on Friday and appears to be bouncing into the 34-day Fibonacci step out on Tuesday - we are expecting an important low in the PM sector by 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 next week's rate hike, 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 after the NFP jobs report - we are looking for a C-Wave down to start after the 3/15 FOMC rate hike decision.
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 3/17.
- Stocks - The SPX held up Monday as action slowed in advance of the 3/15 FOMC rate hike decision. We're expecting a Wave 3 of C down to start in the SPX on Wednesday.
- Gold - Gold declined into Friday's NFP jobs report and then bounced into the 3/12-3/13 Full Moon Timing Window today - we're looking for an import low by 3/17, 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 3/17.
- Crude Oil - Crude oil declined hard into the Full Moon Timing Window and we just went sideways on Monday - we're looking to buy dips in CVX, COP and SLB after the FOMC rate hike decision.
- Bonds - US bonds made another leg down on Monday - we should see a trading low by the 3/15 FOMC rate hike decision.
- 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.