The Daily JDV Market Timer – November 7, 2019

Folks,

Market Observations for the Week: The Dow Jones Transportation joined the DJIA, SPX, and NDX at new all-time highs and the SPX closed above 3080 – is this a breakout? Maybe. But, we would like to see a back-to-back close above SPX 3080 for confirmation. Today, the 5-day CBOE equity put/call ratio gave us a sell signal for the stock market and we are cautious here with the Fear and Greed Index giving us an "extreme greed" reading.

11/07/19 (Commentary for Thursday) The SPX volatility model and the transition of mercury to retrograde motion on 10/31 suggest that we could see a 3-5% pullback start this week but the close above SPX 3080 today argues for a breakout instead. We are patient for a back-to-back close above 3080 before getting more long this market. We believe that the SPX will be much higher by May 2020, but the next two months could see a correction. Gold and silver got sold hard today and the 10/1 lows were undercut – we are in a C-Wave down that could test the 120-day MA for gold at 1457. The USD continues to subdivide higher and broke above 98 before a correction. Our bias is that a 3-5% SPX pullback may be at hand but a close above SPX 3080 would be bullish for a quick move to 3100.

• Big Picture on Stocks (UPDATED) – A two-day close above SPX 3080 would argue for a breakout to our old summer target of 3100, but three sentiment indicators argue for a 3-5% 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 waterfall C-Wave decline into Thursday. Gold and silver could both give us an undercut low on Friday.

   

• Stocks – Our bias is that the SPX may have started a 3-5% correction here, but a two-day close above SPX 3080 would argue for a quick test of 3100.
• Gold – The big buys have capped $1520 resistance and have for forced a bloodbath down to $1461 – lows for the correction. We could make an undercut low down to the 120-MA near $1457 before a bounce. Gold is still trading inverse to the market and further blow off in the SPX will pressure gold down.
• Silver – Silver undercut $17 today but the silver stocks CDE and HL are trying to resist the decline.
• Bonds – Bonds tested 156 and got a corrective bounce.
• Crude Oil – Crude oil tested $57.85 from Wednesday before a pullback – the XLE is correcting 5-waves up on the hourly chart.
• Dollar Index – The USD tested horizontal support at 97.13 and is bouncing to test $98.

TURNING POINT DAY

     

The turn window for this week is 11/3.