Folks,
Market Observations for the Week: The SPX finished 5-waves down on the hourly chart into Wednesday’s close and started an EW a-b-c correction into the 12/3-12/6 New Moon Timing Window that includes a solar eclipse. The NFP jobs report pre-market Friday will set the tone for the open. A weaker than expected jobs number may give the market hope of a less hawkish Fed at the December FOMC meeting. The Russell 2000 also gave us 5-waves down on the hourly chart into Wednesday’s close and started a 3-wave correction into the weekend New Moon. CEOs and other corporate insiders sold a record $69B of stock this year – an all-time record – another sign of a euphoric and topping market that is close to making a historic peak. The Fed made inflation its number one target early Tuesday and Powell hinted that a more aggressive taper would be discussed at the December Fed meeting. So essentially, the SPX is getting hit with a one-two punch from the Omicron variant and a more aggressive Fed and are trading below some heavy Dark Pool prints on the SPY which is bearish. We are seeing a corrective rebound in the NDX and SPX into the 12/3 NFP jobs report which is in the 12/3-12/6 New Moon Timing Window – a weaker than expected NFP jobs number will set the SPX tone at the open. Both the NYA (NYSE Composite) and the IWM finished an EW 5-wave decline on the daily chart on heavy volume days Tuesday and Wednesday – we only expect a retracement bounce into the weekend New Moon. We remain in 50% cash because of the macro factors facing the global economy (Chinese credit contraction, rising global inflation, and rising global rates, new Covid variant, etc.) and now a more aggressive Fed that wants to rein in inflation. Crude oil gave us an undercut low at $62.43 and should also rebound into the New Moon. The GDX is leading the stock market down here – the PM sector tends to trend down into Friday’s NFP jobs report. The USD declined in 5-waves on the hourly chart before spiking higher to 96.61 after the start of Powell’s testimony.
12/01/21 (Commentary for Wednesday) The big range days over the last two weeks in the NDX and SPX are indicative of a BULL MARKET TOP – the one-two punch of the Omicron variant and a hawkish Fed could topple the SPX and NDX over into a bear market after the broad market topped with the Russell 2000 on 11/8. The swing of the Fed’s focus to target inflation over further employment gains hit and the potential economic fallout from the Omicron variant hit the SPX hard into Wednesday’s close and then started an EW a-b-c bounce into the 12/3-12/6 New Moon Timing Window – the NFP jobs report will set the market tone at Friday’s open. Chairman Powell said that he will present a “more aggressive tapering plan” to the new FOMC at the December meeting but a weaker than expected NFP jobs number may complicate that. When the Fed has drained liquidity from the financial markets via cuts in bond purchases, big moves down have started in the stock market since 2008. Bitcoin is also tracing out an EW a-b-c bounce into the weekend New Moon and this looks bearish for the stock market after the 12/3-12/6 New Moon Timing Window. The trendlines from the Covid low on 3/23 turned back the last speculative highs in TSLA, Bitcoin, and the IWM near the 11/4 New Moon and then the NYSE Composite gave us an EW 5-waves down on the daily chart into Tuesday – this has bearish implications for the stock market after a retracement rally into the New Moon weekend. We still hold 50% cash as we feel that the macro risks of being 100% long are just too great with the global credit contraction led by China still progressing and a now more aggressive Fed targeting inflation. Another scary signal came from news that the down payments of 20% of first home buyers came from Bitcoin profits last week – the US economy is highly-levered to widespread speculation in stocks, stock options and digital currencies. Gold and the GDX are trending down into Friday’s NFP jobs report and the New Moon Timing Window – gold may have made a DCL (Daily Cycle Low) today. Crude oil traced out another undercut low at $62.43 and also looks to bounce into the weekend New Moon. Bonds continued to sub-divide higher despite the hawkish tone taken by Chairman Powell on inflation. In the US, the background monetary conditions have been deteriorating for months but the Fed looks determined to quicken the withdrawal of financial liquidity from the US stock market at the December meeting despite slowing global growth concerns. The USD declined in 5-waves on the hourly chart going into Powell’s testimony but did get a spike higher to 96.61 which is getting corrected into Thursday.
Big Picture on Stocks (UPDATED) – The SPX gave us an EW 5-waves down into Wednesday’s close and is bouncing into the weekend New Moon. The Russell 2000 and the NYSE Composite have already given us an EW 5-wave decline on the daily charts into Tuesday which is a bear market signal. A SPX corrective rebound rally into Friday/Monday should be shorted.
Big Picture on PMs (UPDATED) – Gold and the GDX are trending down into Friday’s NFP jobs report – a break below $1758 gold will be very bearish in our work. Gold may have finished a DCL (Daily Cycle Low) on Thursday.
- Stocks – After 5-waves down into Wednesday’s close, the SPX is rebounding into Friday’s NFP jobs report and weekend New Moon. Just a corrective bounce in the SPX and the NDX into Friday/Monday should be shorted for another leg down.
- Gold – Gold continues to trend down into Friday’s NFP jobs report. Gold may have made a DCL (Daily Cycle low) today. An undercut low below $1758 would be bearish.
- Silver – Silver tested $22.18 on Thursday but could give us an undercut low into early Friday.
- Bonds – Bonds continued to sub-divide up Thursday despite the hawkish tone from Chairman Powell.
- Crude Oil – Crude oil tested $62.43 early Thursday and is trying to bounce into the weekend New Moon.
- Dollar Index –The USD declined in 5-waves on the hourly chart into Chairman Powell’s statement and then briefly spiked to 96.64 on Tuesday before correcting into Thursday.
TURNING POINT DAY
The turn window for this week is 12/3-12/6, the New Moon Timing Window.
Comments