The Daily JDV Market Timer – November 5, 2019

Folks,

Market Observations for the Week: We got three different sentiment readings on the stock market that imply a significant top in the SPX is very close – a high comparable to what we got on 9/21/18. Signs of extreme froth are present in the market.

11/05/19 (Commentary for Tuesday) Sentiment readings from three different sources indicate that an important SPX top could be close by: (1) The Whispernumber.com Confidence poll for stocks increased from 43% bullish on 10/18 to 63% bullish on 11/1, (2) The CNNMoney Fear and Greed indicator has flashed to 89% signifying extreme greed, and (3) The ISEE Call/Put ratio gave us an all-time high reading of 297 (extreme greed) reading Tuesday. Today the SPX got to 3085 before correcting into the close but we failed to close above 3080. The SPX volatility model and the transition of mercury to retrograde motion on 10/31 suggest that we could see at least a 5% pullback start this week but a back-to-back close above SPX 3080 would argue for a breakout instead. We believe that the SPX will be much higher by May 2020, but the next two months could see a correction. Gold and silver made early highs on Monday then sold off during Tuesday but with silver stocks holding up bullishly. The USD is doing a C-Wave bounce that could test 98.

• Big Picture on Stocks (UPDATED) – Back-to-back closes above SPX 3080 would argue for a breakout to our old summer target of 3100, but three sentiment indicators argue for a 5% SPX correction to start this week.
• Big Picture on PMs (UPDATED) – The 34-day Fibonacci step out from the 10/1 low topped silver Monday and gave us a decline into Tuesday/Wednesday. Gold and silver stocks must reverse up hard here to keep gold and silver from having a steep correction.

   

• Stocks – The SPX popped to 3085 at the open but started a correction that closed it below 3080. Three sentiment indicators that we follow are registering "extreme greed" so we may start a correction this week.
• Gold – Monday's 34-day Fibonacci step out gave us an early high and then a corrective pullback into Tuesday. Gold may give us an undercut low early Wednesday before bouncing.
• Silver – The SIL (silver stocks) may have finished an EW a-b-c correction into Tuesday.
• Bonds – Bonds pulled back in an EW a-b-c correction after Friday's NFP report that could end on Monday.
• Crude Oil – Crude oil tested $57.5 before a pullback – the oil stocks are now making a nice run higher.
• Dollar Index – The USD tested horizontal support at 97.13 and is bouncing to test $98.

TURNING POINT DAY

     

The turn windows for this week is 11/3.