Market Observations for the Coming Week: The SPX and DJIA are tracing out a sideways correction into the 3/21-3/22 turn window. We are looking for a reversal up by 3/21, the Tuesday after a monthly expiration is a turning point day in our work. The financials may have ended a mild EW a-b-c correction on Monday.
3/20/17 (Commentary for Monday) Our bias is that the SPX and DJIA are doing a sideways (Wave 4 ) correction from 3/1 that could end by the 3/21-3/22 turn window. The stock market could make higher highs into 4/15 (Tax Day) before a significant correction. The financials (XLF) have been weak since the SPX high on 3/1, but we may have ended a mild EW a-b-c correction on Monday. The market remains a tough short here as IRA inflows continue into 4/15. The potential slow down of the Trump agenda with the complexities of the AHCA act is still a threat to the market in the short-term, 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 on Tuesday. Our tactic now is to buy dips in oil stocks, steel stocks and biotech. The GDX started correcting Thursday - we're looking for a leg down into the 3/21-3/22 turn window. The Dollar Index is close to finishing 5-waves down on the hourly chart- we may get a low on Tuesday.
Big Picture on Stocks (UPDATED) - The SPX and DJIA are making a EW a-b-c correction (wave 4) from the 3/1 high that could end in the 3/21-3/22 turn window. The SPX could make higher highs going 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, but more sideways action is likely going into early April where a Fibonacci cluster is due.
- Stocks - The SPX is giving us a small correction into the 3/21-3/22 turn window, and the XLF(financials) may have ended an EW a-b-c correction on Monday. We added FAS calls today.
- Gold - Gold may have made an important intermediate low at $1194.5 - but more sideways action is needed into early April.
- Silver – Silver may be giving us just an EW a-b-c correction from the important 2/28 high - we plan to buy dips in SLW calls on down days.
- Crude Oil - Crude oil may have made an important low near the Full Moon, but the COTs look very bearish - we still hold some COP and SLB calls, but a break below $47 in crude oil could take us to $45 very quickly.
- Bonds - US bonds made an EW 5-wave advance on the hourly into Monday - we have a short-term bullish bias.
- Dollar Index – The $DXY is close to 5-waves down on the hourly - we're looking for a low by Tuesday.
TURNING POINT DAY
The turn window for this week is 3/21-3/22.