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 - this is the QUIETEST EW 5-waves on the hourly that I've ever seen ... DANGER AHEAD ?
3/09/17 (Commentary for Thursday) Did the SPX make an exhaustion gap on 3/1 and an intermediate top? The ES made an EW 5-wave decline into late Friday and we started the next impulse leg down early Tuesday - we have a minimum EW a-b-c symmetry target of ES 2348 and we got to 2354 on Thursday. The NFP jobs report pre-market Friday should set the tone. The oil sector continued to pressure the SPX until late in the trading session when the oil stocks staged a sharp short-covering rally. The VIX gave us an EW 5-wave advance on the hourly chart as some traders are seeking to hedge with "put options". Overall though, this is a QUIET and COMPLACENT market. 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. 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. The $VIX is coiling for a break higher on Friday. Our tactic now is to hold some IWM and QQQ puts and some UVXY calls going into Friday with the idea that we could catch the Wave 3 of a C-Wave down in the SPX. 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 continues to hang in there. Both bonds and gold appear to need more down going into Friday's NFP jobs report and next week's FOMC rate hike decision - we are expecting an important low in the PM sector by 3/17. We still plan to buy dips in oil stocks and biotech shares on any downside volatility into 3/17. The Dollar Index is on track to take out 102.27 by next week's rate hike.
Big Picture on Stocks (UPDATED) - We may have seen an important intermediate top on the SPX on 3/1 - we will watch trade very closely into the 3/10-3/13 Full Moon Timing Window for a possible Wave 3 of C 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're seeing 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 is in a wave 3 of C down with a target of 2348 - we're holding IWM puts and UVXY calls for hedging as we go into the NFP jobs report on Friday.
- Gold - Gold continues to sub-divide down bearishly - we're looking for more decline into the 3/10-3/13 Full Moon Timing Window before a bounce.
- Silver – Silver continues to sub-divide down into the 3/12-3/13 Full Moon Timing Window - we're focused on a potential low by Monday.
- Crude Oil - Crude oil is declining hard into the Full Moon and we're looking for a low by Friday/Monday - we're in a positive seasonality period - we're looking to buy dips in CVX, COP and SLB.
- Bonds - US bonds are impulsing down - we should 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).