Market Observations for the Coming Week: The dovish language after the FOMC rate hike today gave the SPX and GDX big rallies into the close. The NDX led the market to new closing highs today.
3/15/17 (Commentary for Wednesday) The SPX rallied from the open today on 3:1 advance/decline ratio on the NYSE and closed the day on a 4:1 advance/decline ratio - the SPX looks to test 2400 on Thursday. The market loved the dovish spin from Yellen on future rate hikes in 2017 and the NDX made new closing highs. The potential slow down of the Trump agenda with the complexities of the AHCA act is still a threat to the market here, and the SPX and DJIA are still lagging the NDX, but you have to respect the resiliency of this bull market. Crude oil made a low in the orb of the Full Moon/solar eclipse and rallied in 5-waves into Wednesday's close - we're inclined to buy dips in the oil stocks. The VIX took out multi-week lows, and the market remains a difficult short here. 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, but inflows into stock IRA funds could still hold the SPX and DJIA up into 4/15. Our tactic now is to buy dips in oil stocks, gold stocks and biotech shares. The market TOOK BACK its sell signal on our $TICK indicator late Tuesday - this was an early warning sign of the broad-based buying ahead of today's FOMC rate hike. The GDX made a trading low on Friday and spiked into the 3/13 Full Moon/solar eclipse Timing Window before pulling back correctively into the 34-day Fibonacci step out on late Tuesday - this set up an explosive rally after the FOMC rate hike and dovish statement - we plan to buy gold stocks on dips. The Dollar Index appears to be breaking down in a large impulsive move down on the hourly chart - this is bullish for the PM sector.
Big Picture on Stocks (UPDATED) - The NDX closed at new all-time highs after the FOMC rate hike - we expect that the SPX will hold up into the 4/15 tax day on the weight of stock inflows into IRA accounts.
Big Picture on PMs (UPDATED) - We got an important trading low in gold on 3/10 in the Full Moon Timing Window and in silver on 3/15 - we may have started an important rally in the PM sector.
- Stocks - The NDX exploded to new highs after the FOMC rate hike - we plan to buy financial stocks on dips.
- Gold - Gold may have made an important intermediate low at $1194.5 - we're looking to buy dips in GLD and gold stocks calls.
- Silver – Silver made an important low in our 3/15-3/17 turn window - we plan to buy dips in SLW calls.
- Crude Oil - Crude oil may have made an important low early Tuesday - we're looking to buy dips in CVX, COP and SLB calls.
- Bonds - US bonds made a low early Tuesday and then rallied hard after the FOMC rate hike - we're standing aside this market on Thursday.
- Dollar Index – The $DXY fell hard after the FOMC rate hike and the dovish rate hike guidance - this is bullish for the PM sector.
TURNING POINT DAY
The turn window for this week is 3/14-3/15 and includes the 3/15 rate hike decision.