All Star Market Timing

The Daily JDV Market Timer - December 11, 2018

Folks,

Market Observations for the Week:   The SPX ran up to SPX 2671 on early Trump tweets on China trade discussions before a televised fight between Trump and Nancy Pelosi/Chuck Schumer over funding of the border wall riled stocks. Also, Brexit fallout is leading to a "no confidence" vote for Therese May's government that could lead to more European angst and higher highs in the USD. However, the SPX may be tracing out a potentially bullish "inverse head and shoulders" pattern on the daily chart, but how we trade early Wednesday is key. The 55-day trading day cycle from 9/21 projects a low from 12/10 to 12/12 - we may have seen it Monday or we could see it early Wednesday - stay alert.

12/11/18 (Commentary for Tuesday)  A symmetry calculation projected SPX 2670 for a bounce high and we reversed down around that target early in the session. The 55-day trading cycle projected 12/11 +/- 1 day for a potential low - we may have seen it Monday but early Wednesday is also a possibility. We may not get the expected market washout in our 12/10-12/12 turn window, but cycles point to next week as another possibility. We think global markets could still be driven by Brexit fallout early Wednesday and a possible contagion effect in the European credit markets. Crude oil rallied to $52.40 Tuesday morning before correcting. Crude oil's decline to $49.50 on 11/29 may have cemented a 3-yr cycle low in the CRB commodity index - we'll see. Low oil prices continue to stress the high-yield fracking debt that has kept the oil flowing from non-conventional US oil wells and the Fed put out a warning on the large size of US corporate debt as we approach the end of the business cycle. We believe that the October/November stock and commodity decline is signaling a growth slowdown in the US economy that could last through Q1 2019, but the CRB may have made a 3-yr cycle low on 11/29 and this could signal a stronger economy by Q2 2019 - much like in the first half of 2016. Overall, we believe that the 2016-2018 stock bull phase has come to an end and a correction of that 1100 SPX points move could be 600-800 going into Q1 2019. A slightly higher than expected "core PPI report" gave gold a bounce to $1253 early Tuesday but a spiking USD from Brexit worries knocked gold back down to $1246 - gold started a 4th wave correction at the $1256 high on Monday that may have more to run. Brexit fallout spiked the USD to almost yearly highs and it could still make new highs above 97.60.

• Big Picture on Stocks (UPDATED) -  We believe that the SPX is correcting the 1100 SPX rally from 2/8/16 and the SPX could decline 600-800 points into early 2019 with some SHARP RETRACEMENT RALLIES along the way. In the short-term, we count a large EW a-b-c rally from 10/29 as having ENDED on 12/2 with a retest of the 11/7 high at 2814 - that means a large C-Wave down may have started on 12/3 with a target to the 2/9 lows around SPX 2532.
• Big Picture on PMs (UPDATED) -  Gold tested $1256 on Monday and then started some kind of 4th wave correction that took us back to $1246. Professional gold traders are bullish here but the retail interest is very tepid. This looks like a stealthy bull market to us.

 

• Stocks - The 55-day trading cycle is due to bottom 12/10-12/12 - we may have seen the low on Monday but early Wednesday is also a possibility. Brexit fallout could continue to spike the USD. We are holding some VXX calls overnight.
• Gold - A slight higher than expected "core PPI report" gave gold a bounce to $1253 early Tuesday but a spiking USD from Brexit worries knocked gold back down to $1246.  Gold may have finished an EW a-b-c correction (4th wave?). We are holding GLD calls.
• Silver – Silver is leading gold higher here which is bullish - we are holding leap SLV calls.
• Crude Oil - Crude oil appears to be rallying impulsively. OPEC production cuts and a cold US winter season should take us higher into 2019.
• Bonds - US long bonds continue to rally smelling a slowing US economy into Q1 2019.
• Dollar Index – Brexit fallout is keeping the USD elevated near yearly highs as the British Pound gets sold hard.

         

TURNING POINT DAY

 

The turn window for this week is 12/10-12/12.

The Daily JDV Market Timer - December 10, 2018

Folks,

Market Observations for the Week:   The Brexit news helped push us down to SPX 2583 before the stock rebound but we DID NOT get the expected stock washout in our 12/10-12/11 turn window or a VIX spike > 30. New NYSE 52-week lows did spike to correction highs - how we follow through Tuesday will be key. The 55-day Trading cycle was due to bottom Tuesday but it may have happened Monday morning.

12/10/18 (Commentary for Monday)  Brexit concerns drove us down to SPX 2583 (just 50 SPX points off the 2/9 low), but we rallied back with the help of AAPL. We may not get the expected market washout in our 12/10-12/11 turn window, but cycles point to next week as a possibility. The 55-day trading day cycle was due to bottom Tuesday but we may have gotten it early Monday. We think global markets will still be driven by Brexit fallout early Tuesday and a possible contagion effect in the European credit markets. Crude oil rallied into the OPEC production cut announcement on Friday but sold off Monday and tested the $50 support level again. Crude oil's decline to $49.50 on 11/29 may have cemented a 3-yr cycle low in the CRB commodity index - we'll see. Low oil prices continue to stress the high-yield fracking debt that has kept the oil flowing from non-conventional US oil wells and the Fed put out a warning on the large size of US corporate debt as we approach the end of the business cycle. We believe that the October/November stock and commodity decline is signaling a growth slowdown in the US economy that could last through Q1 2019, but the CRB may have made a 3-yr cycle low on 11/29 and this could signal a stronger economy by Q2 2019. Overall, we believe that the 2016-2018 stock bull phase has come to an end and a correction of that 1100 SPX points move could be 600-800 going into Q1 2019. Gold tested $1256 early Monday but reversed down Monday to close below $1250 - we are counting this move as a potential 3rd of a 3rd wave higher on the daily chart and need to see at least a retest of $1256 Tuesday to maintain our bullish stance. The USD held up close to yearly highs on Brexit news and a plunge in the British pound.

• Big Picture on Stocks (UPDATED) -  We believe that the SPX is correcting the 1100 SPX rally from 2/8/16 and the SPX could decline 600-800 points into early 2019 with some SHARP RETRACEMENT RALLIES along the way. In the short-term, we count a large EW a-b-c rally from 10/29 as having ENDED on 12/2 with a retest of the 11/7 high at 2814 - that means a large C-Wave down may have started on 12/3.
• Big Picture on PMs (UPDATED) -  Gold made a weekly close above $1250 horizontal resistance - we may be in a 3rd of a 3rd wave higher on the daily chart - this looks like a stealthy, major breakout to us.

 

• Stocks - We got a Brexit-driven low but not a stock washout on Monday - we sold our VXX calls. Still, new 52-week NYSE lows spiked to correction highs Monday - how we follow up on Tuesday will be key.
• Gold - Gold tested $1256 before reversing down and closing below $1250 on the Comex session - we need to see a reversal higher Tuesday to maintain our bullish posture.
• Silver – Silver is leading gold higher here which is bullish - we are holding leap SLV calls.
• Crude Oil - OPEC production cuts and a cold US winter season should take us higher into 2019.
• Bonds - US long bonds continue to rally smelling a slowing US economy into Q1 2019.
• Dollar Index – Brexit fallout is keeping the USD elevated near yearly highs as the British Pound gets sold hard.

         

TURNING POINT DAY

 

The turn windows for this week is 12/10-12/11.

 

The Weekly JDV Market Timer - December 9, 2018

Folks,

Market Observations for the Week:   The NFP jobs report came in under expectations and after early strength the SPX got sold off hard and CLOSED NEAR THE LOWS. Recent lows include: SPX 2603 on 10/29, SPX 2631 on 11/23, and SPX 2623 on 12/7 - and it is notable that we closed near the lows of the session on Friday. We are expecting a push down to test the Feb lows at SPX 2532 in our 12/10-12/11 turn window this week and a possible market washout. Our $TRIN indicator is now showing fear and we expect a VIX spike into the mid-30s by Tuesday/Wednesday and a high-volume stock washout that could give us a multi-day rally.

12/09/18 (Commentary for Sunday)  For the third time since the 10/3 all-time DJIA highs, the SPX has tested the low 2600s - is this a Triple Bottom? We don't think so - but, with our TRIN-5 indicator FINALLY registering some fear and the VIX sub-dividing higher, we are looking for a market washout by Tuesday/Wednesday with a VIX spike into the mid-30s. We think global markets will be driven by Brexit fears early in the week and a possible contagion effect in the European credit markets. We count the SPX as having finished a large B-Wave bounce from 10/29 on 12/3 with "minor wave-a" peaking on the New Moon on 11/7 at SPX 2814, "minor wave-b" bottoming on the Full Moon on 11/23 at SPX 2626 and "minor wave-c" which ended on SPX 2800 on 12/3 - the move down since 12/3 looks like a C-Wave that could test the Feb 9 lows at SPX 2533. We think that Brexit news on Monday/Tuesday will be a key market driver. Crude oil's rally from the $49.50 low on 11/29  looks impulsive and we retested that low on the 12/6 New Moon - OPEC's production cuts and a cold winter in the USA should push us higher. Crude oil's decline may have cemented a 3-yr cycle low in the CRB commodity index. Low oil prices continue to stress the high-yield fracking debt that has kept the oil flowing from non-conventional US oil wells and the Fed put out a warning on the large size of US corporate debt as we approach the end of the business cycle. We believe that the October/November stock and commodity decline is signaling a growth slowdown in the US economy that could last through Q1 2019, but the CRB may have made a 3-yr cycle on 11/29 and this could signal a stronger economy by Q2 2019. Overall, we believe that the 2016-2018 stock bull phase has come to an end and a correction of that 1100 SPX points move could be 600-800 points with lower lows ahead for us early this week. Gold closed above horizontal resistance at $1250 on Friday and appears to have made a SLIGHTLY-NOTICED multi-month break out - we are counting this move as a potential 3rd of a 3rd wave higher on the daily chart. The USD is still holding up on Brexit news and a rebound in the Chinese Yuan.

• Big Picture on Stocks (UPDATED) -  We believe that the SPX is correcting the 1100 SPX rally from 2/8/16 and the SPX could decline 600-800 points into early 2019 with some SHARP RETRACEMENT RALLIES along the way. In the short-term, we count a large EW a-b-c rally from 10/29 as having ENDED on 12/2 with a retest of the 11/7 high at 2814 - that means a large C-Wave down may have started on 12/3.
• Big Picture on PMs (UPDATED) -  Gold made a weekly close above $1250 horizontal resistance - we may be in a 3rd of a 3rd wave higher on the daily chart - this looks like a stealthy, major breakout to us.

 

• Stocks - Looking for a Brexit-driven stock washout into our 12/10-12/11 turn window - a VIX spike into the mid-30s would get us to sell our VXX calls.
• Gold - Gold made a weekly close above key horizontal resistance at $1250 - this looks like a 3rd of a 3rd wave higher on the daily chart that could test $1300+ by X-mas. We are holding GLD calls.
• Silver – Silver is leading gold higher here which is bullish - we are holding leap SLV calls.
• Crude Oil - OPEC production cuts and a cold US winter season should take us higher into 2019.
• Bonds - Bonds are finally getting that large short-covering rally from the huge speculative short position in the COTs - looking for higher prices early this week.
• Dollar Index – A break below 96 in the USD would be very bullish for the PM sector but a rebounding Chinese Yuan and more Brexit turbulence is keeping the USD elevated.

         

TURNING POINT DAY

 

The turn windows for this week is 12/10-12/11.

 

 

The Daily JDV Market Timer - December 6, 2018

Folks,

Market Observations for the Week:   The SPX took out the Thanksgiving low at 2626 and then rebounded back up to try and test that important pivot at 2700. Lots of reasons were given for the latest plunge and rebound but the technicals were obvious - the E-mini gave us a clear EW 5-waves down on the hourly chart into late Wednesday and the NYSE breadth opened Thursday at an extremely oversold -2400. When the European markets closed around 11:30 AM EST, the SPX started its rebound. The NFP jobs report on Friday will be a key barometer of US growth as >200,000 new jobs are expected - making or missing this number will set the early tone on Wall Street. The wage inflation numbers could also be a market mover.

12/06/18 (Commentary for Thursday)  The SPX got very oversold on Thursday's open as > 500 stocks on the NYSE hit new 52-week lows, but after the SPX undercut the Thanksgiving low below SPX 2626, the market rebounded into the close. Did we see an important low today? That is hard to say, the volume was not that high today and the rebound rally did not look "clearly impulsive to us". But in any case, Friday's 8:30 AM EST release of the NFP jobs report will set the market tone at the open - the market is expecting > 200,000 jobs to be created and making/missing this mark will set the early tone. We count the SPX as having finished a large EW a-b-c bounce from 10/29 with "minor wave-a" peaking on the New Moon on 11/7 at SPX 2814, "minor wave-b" bottoming on the Full Moon on 11/23 at SPX 2626 and "minor wave-c" which ended on a retest of the 11/7 high at SPX 2814 on 12/3 - this is still our bias, but it could change depending on Friday's tape. Crude oil's rally from $49.50 looked impulsive and we may have set an important low last week, but we pulled back to test that low on today's New Moon. Crude oil's decline may have cemented a 3-yr cycle low in the CRB commodity index. Low oil prices continue to stress the high-yield fracking debt that has kept the oil flowing from non-conventional US oil wells and the Fed put out a warning on the large size of US corporate debt as we approach the end of the business cycle. We believe that the October/November stock and commodity decline is signaling a growth slowdown in the US economy that could last through Q1 2019, but the CRB may have made a 3-yr cycle on 11/29 and this could signal a stronger economy by Q2 2019. Overall, we believe that the 2016-2018 stock bull phase has come to an end and a correction of that 1100 SPX points move could be 600-800 points with the bulk of that still ahead of us. Gold tested horizontal resistance at $1250 and then pulled back going into Friday's NFP jobs report - we are counting this move as a potential 3rd of a 3rd wave higher on the daily chart. The USD is still holding up on Brexit news and a rebound in the Chinese Yuan.

• Big Picture on Stocks (UPDATED) -  We believe that the SPX is correcting the 1100 SPX rally from 2/8/16 and the SPX could decline 600-800 points into early 2019 with some SHARP RETRACEMENT RALLIES along the way. In the short-term, we count a large EW a-b-c rally from 10/29 as having ENDED on 12/2 with a retest of the 11/7 high at 2814 - that means a large C-Wave down may have started on Monday.
• Big Picture on PMs (UPDATED) -  Gold tested horizontal resistance at $1250 and then pulled back into Friday's NFP jobs report - this looks like a stealthy breakout to us, a close above $1246 should ignite a big short-covering rally.

 

• Stocks - The NFP jobs report will set the market tone early Friday -  weaker than expected job creation could sell the market off.
• Gold - Gold tested $1250 horizontal resistance before selling off to $1242 - closing above $1246 could ignite a big short-covering rally.
• Silver – We like gold over silver in a stock market correction, but the gold/silver ratio argues that silver will outperform gold in 2019.
• Crude Oil - Crude oil tested $49.50 on today's New Moon - the OPEC meeting should reach some kind of positive arrangement for price.
• Bonds - Bonds are finally getting that large short-covering rally from the huge speculative short position in the COTs.
• Dollar Index – A break below 96 in the USD would be very bullish for the PM sector but a rebounding Chinese Yuan and more Brexit turbulence is keeping the USD elevated.

         

TURNING POINT DAY

 

The turn windows for this week is 12/3 and 12/6-12/7.

The Daily JDV Market Timer - December 4, 2018

Folks,

Market Observations for the Week:   The SPX "doji" candlestick on Monday turned the market back down with a vengeance - the SPX closed the gap-up opening at 2761 and then kept right on going! A flattening US Treasury yield curve warning of slowing US growth and a messy Brexit added to the fears behind today's selloff. For us, the Wave B bounce from 10/29 topped out on 12/2 on the 34-day Fibonacci step out and we may have started a Wave C down that could test the 2/2 low at SPX 2532. The NFP jobs report on Friday will be a key barometer of US growth as >200,000 new jobs are expected. The wage inflation numbers could also be a market mover.

12/04/18 (Commentary for Tuesday)  Today was a rough market day fueled by fears of a US economic slowdown and a messy Brexit situation. The market was also frustrated by a lack of clarity on the week-end Trump-Ji trade deal - it appears that Trump blinked with little concession from the Chinese. The VIX spiked above 20 again and the $TRIN closed at 2.76 showing some real fear. When the 200-day MA was breached at 2750, technical traders took over and sold the market. We count the SPX as having FINISHED a large EW a-b-c bounce from 10/29 with "minor wave-a" peaking on the New Moon on 11/7 at SPX 2814, "minor wave-b" bottoming on the Full Moon on 11/23 at SPX 2626 and "minor wave-c" which ended on a retest of the 11/7 high at SPX 2814 on 12/3. Crude oil's rally from $49.50 is looking impulsive and we may have set an important low last week but we will see how we trade through the 12/6 New Moon. Crude oil's decline may have cemented a 3-yr cycle low in the CRB commodity index. Low oil prices continue to stress the high-yield fracking debt that has kept the oil flowing from non-conventional US oil wells and the Fed put out a warning on the large size of US corporate debt as we approach the end of the business cycle. We believe that the October/November stock and commodity decline is signaling a growth slowdown in the US economy that could last through Q1 2019, but the CRB may have made a 3-yr cycle last week and this could signal a stronger economy by Q2 2019. Overall, we believe that the 2016-2018 stock bull phase has come to an end and a correction of that 1100 SPX points move could be 600-800 points with the bulk of that still ahead of us. Gold quietly took out the $1246 high on 10/26 and we are counting the move as a 3rd wave higher on the daily chart - today's move was very stealthy, with no mention from CNBC commentators, and we think this is bullish. The USD is still holding up on Brexit news and a rebound in the Chinese Yuan.

• Big Picture on Stocks (UPDATED) -  We believe that the SPX is correcting the 1100 SPX rally from 2/8/16 and the SPX could decline 600-800 points into early 2019 with some SHARP RETRACEMENT RALLIES along the way. In the short-term, we count a large EW a-b-c rally from 10/29 as having ENDED on 12/2 with a retest of the 11/7 high at 2814 - that means a large C-Wave down may have started on Monday.
• Big Picture on PMs (UPDATED) -  We spiked above the $1246 high today before consolidating - this looks like a stealthy breakout to us - a close above $1246 should ignite a big short-covering rally.

 

• Stocks - When the SPX fell below 2750 today, the technical traders sold the market hard. Our count says that the Wave B rebound from 10/29 ended Monday on a retest of 2814 - that means that a big Wave C down has started that could test the 2/2 low at SPX 2532 soon. The TRIN barfed today with a 2.76 close - will the VIX barf above 30 on Thursday?
• Gold - Gold spiked above $1246 in a quiet breakout - closing above $1246 could ignite a big short-covering rally.
• Silver – We like gold over silver in a stock market correction, but the gold/silver ratio argues that silver will outperform gold in 2019.
• Crude Oil - Crude oil is rallying impulsively - last week's low at $49.50 may have been an important low.
• Bonds - Bonds are finally getting that large short-covering rally from the huge speculative short position in the COTs.
• Dollar Index – A break below 96 in the USD would be very bullish for the PM sector but a rebounding Chinese Yuan and more Brexit turbulence is keeping the USD elevated.

         

TURNING POINT DAY

 

The turn windows for this week is 12/3 and 12/6-12/7.

The Daily JDV Market Timer - December 3, 2018

Folks,

Market Observations for the Week:   The SPX gave us a gap -up opening today and the E-mini is working to fill that gap in 3-waves late Monday. We could see a gap-fill early Tuesday on the SPX at 2761 and another rally attempt but Monday's price action traced out a "doji" candlestick which implies a pullback early Tuesday. After the Fed chairman's dovish comments and the trade compromise with China there is a lot of good news built into this market, so some kind of pullback Tuesday should be expected.

12/03/18 (Commentary for Monday)  After the Fed chairman's dovish comments and the trade compromise with China there is a lot of good news built into this market, so some kind of pullback Tuesday should be expected. With that in mind, a "symmetrical move" to the rally from 10/29 to 11/7 would take the SPX to 2837 and if we reach that target on Thursday's New Moon that could be worth shorting. Our bias remains that we are in a "bull market correction" that should make final lows in Q1 2019 before a final run to new highs above SPX 3200. We count the SPX as in a large EW a-b-c bounce from 10/29 with "minor wave-a" peaking on the New Moon on 11/7 at SPX 2814, "minor wave-b" bottoming on the Full Moon on 11/23 at SPX 2626 and "minor wave-c" with a target of SPX 2834 perhaps by Thursday. Crude oil's rally from $49.50 is looking impulsive and we may have set an important low last week. Crude oil's decline may have cemented a 3-yr cycle low in the CRB commodity index. Low oil prices continue to stress the high-yield fracking debt that has kept the oil flowing from non-conventional US oil wells and the Fed put out a warning on the large size of US corporate debt as we approach the end of the business cycle. We believe that the October/November stock and commodity decline is signaling a growth slowdown in the US economy that could last through Q1 2019, but the CRB may have made a 3-yr cycle last week and this could signal a stronger economy by Q2 2019. Overall, we believe that the 2016-2018 stock bull phase has come to an end and a correction of that 1100 SPX points move could be 600-800 points. The US-China trade truce is given gold a boost to test the  $1246 high - a close above $1246 would be very bullish. The USD appears to be breaking down after the US-China trade truce - a break below 96 would be bullish for the PM complex.

• Big Picture on Stocks (UPDATED) -  We believe that the SPX is correcting the 1100 SPX rally from 2/8/16 and the SPX could decline 600-800 points into early 2019 with some SHARP RETRACEMENT RALLIES along the way. In the short-term, we count a large EW a-b-c rally from 10/29 which has "minor wave-c" potentially testing  SPX 2834 by Thursday's New Moon.
• Big Picture on PMs (UPDATED) -  We closed above $1235 on Monday and gold is testing $1246 early Tuesday - a close above $1246 should ignite a big short-covering rally.

 

• Stocks - We should see a gap-fill  early Tuesday at 2761 before a bounce attempt.
• Gold - Gold closed above $1235 on Monday and is now testing $1246 - closing above $1246 could ignite a big short-covering rally.
• Silver – We like gold over silver in a stock market correction, but the gold/silver ratio argues that silver will outperform gold in 2019.
• Crude Oil - Crude oil is rallying impulsively - last week's low at $49.50 may have been an important low.
• Bonds - Bonds are rallying hard Monday night as stock futures pull back.
• Dollar Index – A break below 96 in the USD would be very bullish for the PM sector.

         

TURNING POINT DAY

 

The turn windows for this week is 12/3 and 12/6-12/7.

 

The Daily JDV Market Timer - December 2, 2018

Folks,

Market Observations for the Week:   The SPX rallied Friday going into the G-20 meeting this weekend in Argentina - we  started the 5th wave up on the hourly chart from 11/23 Friday afternoon, but we got a TRIN-5 sell signal on Friday's close. The Trump-Ji dinner Saturday night ended on a high note - Zero Hedge reports that a compromise was reached and that new tariffs will not be imposed on January 1. Overall, our bias is that we are in a bull market correction that will make lower correction lows in Q1 2019 before a run to new highs, but we are now in a wave-c higher of a large EW a-b-c bounce that started on 10/29 at SPX 2603 and now is targeting a retest of the 11/7 New Moon high at SPX 2814 on Monday.

12/02/18 (Commentary for Sunday)  The SPX started its 5th wave rally off the low on 11/23 and anticipated the trade truce between Trump and Ji. The E-mini has exploded over 2800 Sunday night - a test of the 11/7 high at SPX 2814 is likely on Monday. With Fed Chairman Powell's skillful walk back of his rate hawkish comments from 10/3 on Wednesday, and a short-term trade compromise between Trump and Ji, global markets should get a boost early in the week. Our bias remains that we are in a "bull market correction" that should make final lows in Q1 2019 before a final run to new highs above SPX 3200. We count the SPX as in a large EW a-b-c bounce from 10/29 with "minor wave-a" peaking on the New Moon on 11/7 at SPX 2614, "minor wave-b" bottoming on the Full Moon on 11/23 at SPX 2626 and "minor wave-c" with a target of SPX 2820 perhaps by Monday/Tuesday. Crude oil broke down in 5-waves into Thursday and tested $49.50 - we are now in a 3-wave corrective bounce that could test >$53 by Tuesday. Low oil prices continue to stress the high-yield fracking debt that has keep the oil flowing from non-conventional US oil wells and the Fed put out a warning on the large size of US corporate debt as we approach the end of the business cycle. We believe that the October/November stock and commodity decline is signaling a growth slowdown in the US economy that could last through Q1 2019, but the CRB is moving down into a 3-yr cycle low due in December and this could signal a stronger economy by Q2 2019. Overall, we believe that the 2016-2018 stock bull phase has come to an end and a correction of that 1100 SPX points move could be 600-800 points. Powell's dovish comments on rates reversed gold sharply higher to test $1235 on Thursday - will the US-China trade truce be bullish for gold on Monday? Gold and the GDX both formed "inverse Head and Shoulders" patterns on their daily charts and did some backing and filling on the right-hand shoulder on Thursday/Friday - gold needs to close above $1230.9 to get things going on the upside. The USD tested the recent 97.40 high on Friday before reversing down - the US-China trade truce on Saturday may give the USD a pullback on Monday.

• Big Picture on Stocks (UPDATED) -  We believe that the SPX is correcting the 1100 SPX rally from 2/8/16 and the SPX could decline 600-800 points into early 2019 with some SHARP RETRACEMENT RALLIES along the way. In the short-term, we count a large EW a-b-c rally from 10/29 which has "minor wave-c" potentially testing  SPX 2820 by 12/4.
• Big Picture on PMs (UPDATED) -  Powell's comments launched gold higher to $1235 on Thursday before a pullback - a close above $1231 could quickly give us a test of $1246. The trade compromise with China at the G-20 should boost gold Sunday/Monday.

 

• Stocks - Late Friday the SPX rallied in a 5th wave off the 11/23 low and anticipated the Trump-Ji trade compromise on Saturday night. We are looking for a test of SPX 2820 on Monday.
• Gold - Powell's comments ignited a big short-covering in the gold market which got us to $1235 on Thursday before a pullback. A daily close above $1231 could bring a quick retest of $1246. A Trump-Ji trade compromise should benefit gold.
• Silver – We like gold over silver in a stock market correction, but the gold/silver ratio argues that silver will outperform gold in 2019.
• Crude Oil - Crude oil tested $49.5 after 5-waves down on the hourly chart - we could get a bounce to >$53 by Monday.
• Bonds - Bonds are selling off Sunday night on the Trump-Ji trade compromise.
• Dollar Index – The USD is pulling back Sunday night after the trade compromise.

         

TURNING POINT DAY

 

The turn window for this week is 12/3-12/4.

The Daily JDV Market Timer - November 29, 2018

Folks,

Market Observations for the Week:   The SPX continued the post-Fed rally and tested mid-November highs before finding resistance and reversing down - we may have ended wave 3 of C from 11/23 and started a 4th wave correction. We are looking for more correction into Friday as the market stresses over the Trump-Ji meeting at the G-20, but expect a 5th wave higher by Monday that could test SPX 2800. Our bias is that we are in a bull market correction that will make lower correction lows in Q1 2019 before a run to new highs, but we are now in a wave-c higher of a large EW a-b-c bounce that started on 10/29 at SPX 2603 and now is targeting a retest of SPX 2800 into early next week.

11/29/18 (Commentary for Thursday)  The SPX continued to rally post-Fed today and may have started a wave 4 of C correction late in the day. We expect some kind of compromise statement from Trump and Ji at the G-20 that could boost the SPX back to 2800 early next week. By giving the stock market hopes for just one more hike in December and then a pause, Powell skillfully shifted the spotlight back to Trump and his trade discussions with Ji for the near-term direction of the stock market. Our bias remains that we are in a "bull market correction" that should make final lows in Q1 2019 before a final run to new highs above SPX 3200. We count the SPX as in a large EW a-b-c bounce from 10/29 with "minor wave-a" peaking on the New Moon on 11/7 at SPX 2614, "minor wave-b" bottoming on the Full Moon on 11/23 at SPX 2626 and "minor wave-c" with a target of SPX 2820 perhaps by Monday. We didn't get the anticipated credit crisis in the European banking system but Deutsche Bank headquarters was raided today by police following up on allegations of international money laundering - this could be the tip of the iceberg. Crude oil broke down in 5-waves on the hourly chart to $49.50 before reversing higher - low oil prices continue to stress the high-yield fracking debt that has keep the oil flowing from non-conventional US oil wells.  We believe that the October/November stock and commodity decline is signaling a growth slowdown in the US economy that could last through Q1 2019, but the CRB is moving down into a 3-yr low due in December and this could signal a stronger economy by Q2 2019 just like in Q2 2016. Overall, we believe that the 2016-2018 stock bull phase has come to an end and a correction of that 1100 SPX points move could be 600-800 points. Powell's comments reversed gold sharply higher on the 34-day Fibonacci step out from the $1246 high on 10/25. Gold and the GDX both formed "inverse Head and Shoulders" patterns on their daily charts and then reversed higher into Thursday - gold needs to close above $1230.9 to get things going on the upside. The USD got a bearish "engulfing candlestick" on the daily chart and that should take us lower into Friday.

• Big Picture on Stocks (UPDATED) -  We believe that the SPX is correcting the 1100 SPX rally from 2/8/16 and the SPX could decline 600-800 points into early 2019 with some SHARP RETRACEMENT RALLIES along the way. In the short-term, we count a large EW a-b-c rally from 10/29 which has "minor wave-c" potentially testing  SPX 2800 by Monday.
• Big Picture on PMs (UPDATED) -  Powell's comments launched gold higher Wednesday on the 34-day Fibonacci step out from the 10/25 high($1246) - a close above $1231 could quickly give us a test of $1246. A trade compromise with China at the G-20 could give gold a boost.

 

• Stocks - The SPX finished a wave 3 of C higher today from the 11/23 low and started a 4th wave correction late in the day. We are looking for more correction on Friday before a 5th wave higher to test SPX 2800 early next week. We are expecting some kind of Trump-Ji compromise statement on trade.
• Gold - Powell's comments ignited a big short-covering in the gold market which got us to $1235 on Thursday before a pullback. A daily close above $1231 could bring a quick retest of $1246.
• Silver – We like gold over silver in a stock market correction, but the gold/silver ratio argues that silver will outperform gold in 2019.
• Crude Oil - Crude oil tested $49.5 after 5-waves down on the hourly chart - we could get a bounce to $53.
• Bonds - Bonds rallied early when the police raided Deutsche Bank headquarters but sold off late - the Libor rates spiked early on the news from DB.
• Dollar Index – The USD got a "bearish engulfing" candle today on the daily chart and that argues for lower prices on Friday.

         

TURNING POINT DAY

 

The turn window for this week is 11/26-11/27 - which includes the 55-day Fibonacci step out from the 10/3 all-time DJIA high.

The Daily JDV Market Timer - November 28, 2018

Folks,

Market Observations for the Week:   The "close to neutrality" comments by Fed chairman Powell gave stocks a green light to rally today. The hope of one more rate hike in December and then a long pause gave stocks what they wanted. Our bias is that we are in a bull market correction that will make lower correction lows in Q1 2019 before a run to new highs, but we are now in a wave-c higher of a large EW a-b-c bounce that started on 10/29 at SPX 2603 and now is targeting SPX 2820 by Friday/Monday.

11/28/18 (Commentary for Wednesday)  Chairman Powell's comments on "close to neutrality" gave the market what it wanted today and now all eyes turn to the G-20 meeting in Argentina and the trade discussions between Trump and Ji. By giving the stock market hopes for just one more hike in December and then a pause, Powell skillfully shifted the spotlight back to Trump and his trade discussions with Ji for the near-term direction of the stock market. Our bias remains that we are in a "bull market correction" that should make final lows in Q1 2019 before a final run to new highs. We count the SPX as in a large EW a-b-c bounce from 10/29 with "minor wave-a" peaking on the New Moon on 11/7 at SPX 2614, "minor wave-b" bottoming on the Full Moon on 11/23 at SPX 2626 and "minor wave-c" with a target of SPX 2820 perhaps by Friday/Monday. We didn't get the anticipated credit crisis in the European banking system but high-yield corporate bonds (HYG) remain under pressure - most investment grade bond funds contain a large fraction of low investment-grade (BBB) debt (such as for GE) that could be downgraded soon if the US economy continues to slow into Q1 2019. Crude oil looks ready to test $50 again and low oil prices continue to stress the high-yield fracking debt that has keep the oil flowing from non-conventional US oil wells.  We believe that the October/November stock and commodity decline is signaling a growth slowdown in the US economy that could last through Q1 2019, but the CRB is moving down into a 3-yr low due by December and this could signal a stronger economy by Q2 2019 just like in Q2 2016. Overall, we believe that the 2016-2018 stock bull phase has come to an end and a correction of that 1100 SPX points move could be 600-800 points. Powell's comments sparked a sharp gold rally that could have legs here. Gold and the GDX both formed "inverse Head and Shoulders" patterns on their daily charts and reversed higher today - how we trade on Thursday will be key for the PM sector. The USD may be tracing out just an EW a-b-c correction on the daily chart and wave-C down may have started today.

• Big Picture on Stocks (UPDATED) -  We believe that the SPX is correcting the 1100 SPX rally from 2/8/16 and the SPX could decline 600-800 points into early 2019 with some SHARP RETRACEMENT RALLIES along the way. In the short-term, we count a large EW a-b-c rally from 10/29 which has "minor wave-c" targeting SPX 2820 by Friday/Monday.
• Big Picture on PMs (UPDATED) -  Powell's comments launched gold higher today - a close above $1231 could quickly give us a test of $1246. A trade deal with China or a softer tone from the Fed on raising rates could rally this market on a dime by 11/30.

 

• Stocks - Powell skillfully catered to political pressure and hinted a possible "one more and done" rate hike strategy to the markets. The SPX is now looking to test the 11/7 high at 2814 by maybe Friday/Monday.
• Gold - Powell's comments ignited big short-covering in the gold market which could carry through into Thursday. A daily close above $1231 could bring a quick retest of $1246.
• Silver – We like gold over silver in a stock market correction, but the gold/silver ratio argues that silver will outperform gold in 2019.
• Crude Oil - Crude oil is threatening to retest $50 again - that is bearish for stocks.
• Bonds - Bonds are looking to retest last Friday's high near 140.50.
• Dollar Index – The USD may be pulling back in a wave-c of an EW a-b-c correction on the daily chart.

         

TURNING POINT DAY

 

The turn window for this week is 11/26-11/27 - which includes the 55-day Fibonacci step out from the 10/3 all-time DJIA high.

The Daily JDV Market Timer - November 27, 2018

Folks,

Market Observations for the Week:   The SPX gave us another rally day as the market held up going into Powell's talk at noon EST Wednesday. The SPX did close above 2670 horizontal resistance but still closed under the 9-day EMA curve which has served as resistance since the 10/3 all-time high. On the negative side, the SPX closed up 8.75 points but on weak volume and negative breadth. Perhaps our 12/26-12/27 turn window will be a high instead of a low this week - how we trade on Wednesday after Fed chair Powell's talk at noon EST is key.  

11/27/18 (Commentary for Tuesday)  Both crude oil and the SPX were pulled down into Friday's Full Moon and both continued an oversold rally that continued into Tuesday. Larry Kudlow's downplay of the US/China trade talks didn't keep the SPX from a second consecutive rally day. Traders are hoping for some dovish comments from Powell's talk at noon EST Wednesday that could extend the rally, however, a hawkish statement from the Fed chair could reverse the market back down. We didn't get the anticipated credit crisis in the European banking system but high-yield corporate bonds (HYG) remain under pressure - most investment grade bond funds contain a large fraction of low investment-grade (BBB) debt (such as for GE) that could be downgraded soon if the US economy continues to slow into Q1 2019. Crude oil continued its corrective-looking rally into Tuesday evening and low oil prices continue to stress the high-yield fracking debt that has kept the oil flowing from non-conventional US oil wells.  We believe that the October/November stock and commodity decline is signaling a growth slowdown in the US economy, but the CRB is moving down into a 3-yr low due by January and this could signal a stronger economy by Q2 2019 just like in Q2 2016. Overall, we believe that the 2016-2018 stock bull phase has come to an end and a correction of that 1100 SPX points move could be 600-800 points. The weak GDX/GLD ratio telegraphed the decline in gold today, but it's typical for gold to pull back into the FOMC day. Gold and the GDX may both be forming "inverse Head and Shoulders" patterns on their daily charts  - how we trade after the FOMC minutes is key for the PM sector. The USD may be tracing out just an EW a-b-c correction on the daily chart - hawkish comments from Powell on Wednesday could keep us elevated.

• Big Picture on Stocks (UPDATED) -  We believe that the SPX is correcting the 1100 SPX rally from 2/8/16 and the SPX could decline 600-800 points into early 2019 with some SHARP RETRACEMENT RALLIES along the way. In the short-term, we see an oversold bounce in the SPX into the 11/26-11/27 turn window.
• Big Picture on PMs (UPDATED) -  The USD looks like it wants to take out the recent 97.5 high into Wednesday's FOMC media events. The weakening GDX/GLD ratio telegraphed the decline in gold Tuesday but both gold and the GDX appear to be forming "inverse Head and Shoulders " patterns on the daily chart. A trade deal with China or a softer tone from the Fed on raising rates could rally this market on a dime by 11/30.

 

• Stocks - The SPX continued higher into Tuesday but both volume and breadth lagged - a reversal back down after a hawkish Powell statement would not surprise us. 
• Gold - The weak GDX/GLD ratio led gold down today, but both gold and the GDX may be forming potentially bullish "inverse Head and Shoulders" patterns on the daily chart - how we trade after Powell's comments will be key.
• Silver – We like gold over silver in a stock market meltdown, but the gold/silver ratio argues that silver will outperform gold in 2019.
• Crude Oil - Crude oil is giving us a corrective looking bounce into Tuesday night.
• Bonds - Bonds appear to be just giving us an EW  a-b-c correction on the hourly chart.
• Dollar Index – The USD appears to be impulsing higher with a target above the recent high at 97.5.

         

TURNING POINT DAY

 

The turn window for this week is 11/26-11/27 - which includes the 55-day Fibonacci step out from the 10/3 all-time DJIA high.