Market Observations for the Coming Week: We appear to have started an EW a-b-c correction on the SPX daily on 3/1 and we may have finished the Wave B bounce near Monday's close - we could see a Wave C down early Tuesday.
3/06/17 (Commentary for Monday) The SPX continued its mild correction into Monday and we may have more to go on the downside - a C-Wave down early Tuesday is a possibility, but a move above Monday's high would argue for a retest of the 3/1 high. We are in the most potent geo-cosmic timing window of the year, 3/3-3/6, and we are seeing 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 may be a sign of some king of top. The euphoria of Trump's more presidential-like State of the Union address carried the market beyond the New Moon/solar eclipse on 2/26-2/27 and into the 3/1 top which may be an important intermediate high. The $VIX did make a weekly low Friday and volatility may be poised for a reversal higher. Our tactic now is to hold some IWM puts and some UVXY calls going into Tuesday with the idea that we have a C-Wave down to come in this correction. The market is close to giving us sell signals on our $TICK indicator - a break of the "zero line" on the 15-period simple moving average on the hourly $TICK. Both bonds and gold appear to need more down going into next week's FOMC rate hike decision - we are expecting an important low in the PM sector next week. We still plan to buy dips in oil stocks and biotech shares on any downside volatility this week. The Dollar Index may have finished an EW 5-wave rally last week on the hourly chart.
- Big Picture on Stocks (UPDATED) - We're looking for an intermediate-term SPX top by the potent 3/3-3/6 geo-cosmic turn window - we will watch trade very closely on Tuesday for a possible C-Wave down.
- Big Picture on PMs (UPDATED) - The GDX made a high on the 21-day Fibonacci step out from 2/8 on Wednesday and we saw another leg down. We're looking for an important low in the 3/14-3/15 turn window which includes the 34-day Fibonacci step out from 2/08, the Full Moon Timing Window, and a potential FOMC rate hike.
- Stocks - The SPX still needs a C-Wave down Tuesday to finish a correction - we're holding IWM puts and UVXY calls - we sold our SPY and QQQ calls today.
- Gold - Gold only gave us a tepid rally after North Korean's provocative missile launches - BEARISH - we're looking for more decline into next week's FOMC rate hike decision.
- Silver – Silver may be giving us just an EW a-b-c bounce from Friday - we're focused on a potential low after next week's FOMC rate hike decision.
- Crude Oil - The oil sector is at a crossroads - we have positive seasonality but the oil stocks must lead us higher.
- Bonds - US bonds are impulsing down - we may see a trading low by the 3/15 FOMC rate hike decision.
- Dollar Index – We're looking for another rally leg above 102.27 into the 3/15 FOMC rate hike decision.
TURNING POINT DAY
The turn windows for this week are 3/3-3/6 and 3/10 (the NFP jobs report).