All Star Market Timing: The Daily JDV Market Timer

Market Observations for the Coming Week: WARNING: we are looking for the August-October period to be highly volatile for several markets (See our 8/6/15 talk on the Shemittah cycle - "Can the Stock Market Crash Going Into October - Weighing the Probabilities" https://www.youtube.com/watch?v=5tgPXoA9x00). Several important stock market cycles are due to bottom: the Shemittah cycle (7-yr), the 4-yr cycle, and the 50-wk cycle. We should also see extreme volatility in gold, bonds and commodities. Holding a large position in cash as we enter this period is recommended. Our turn window on 9/21-9/22 gave us a pre-market reversal higher on Monday and then a reversal down Tuesday - the Tuesday after a Triple Witching expiration is a key turn day in our work. Regardless of near-term bounces, we are looking for another leg down to test SPX 1800 in October.

09/23/15 (Commentary for Wednesday) The SPX made a top on 9/17 and appears to be winding up in an EW 1-2, i-ii downside pattern on the hourly chart. Still, a small rally is possible on Thursday before a reversal down. Any bounce in the SPX on Thursday should be sold as sentiment on the stock market is still too complacent considering the amount of technical damage that we've seen to the SPX. The hit to the biotech sector on Monday is causing a "take profits" attitude in this sector that has been one of the few with earnings visibility. Hillary Clinton's tweet on "price gouging" for drugs sent shock waves through the IBB index on Monday and the selling continued into Wednesday. We did see a bounce higher in the bonds today but that may be just the end of a rising diagonal pattern. We expect bonds to lead the next leg down in stocks into October. The post-Labor Day SPX ended on 9/17 and any bounce into 9/24 should be sold for a leg down into October. Oil fell hard on Wednesday but we remain adamant that $37.75 was the major low - calls for $20 oil do not look likely to us. Our bias is that a major low was made at $37.75 and this marked a 3-yr cycle low in both oil and the CRB - however, we could see more testing of lows into October. The late August price action confirmed a four-year cycle top in the SPX and suggests a 20% decline into October and we currently favor a corrective pattern similar to 1998 where we had a 7/20 peak and a scary decline into late August before a big reversal up into September and then a lower low into October. Gold ran up on Friday after the Fed decision and held up on Wednesday - we need to rally above $1141 to signal that a rally into the 9/28 Full Moon is underway. We still contend that the stock market could manage a 20% correction as we bottom the 7-yr cycle in the Aug - Oct period and the post-Labor Day "head fake rally" into 9/17 may have set the hook for the next leg down into October.

Big Picture on Stocks (UPDATED) - With China leading global markets down, commodities and commodity stocks are being pressured. We are expecting a big correction from August to October which should make a 4-yr cycle low and 7-year cycle low. The post-Labor Day rally ended after the FOMC decision on 9/17 - we're biased to sell bounces in the SPX into 9/24 for a big leg down into October.