Folks,
Market Observations for the Week: The SPX rallied out of the gate on Wednesday's Fed-minutes day and the New Moon pulled it above its 11/15 high at 4028.84. The 11/23-11/25 New Moon Timing Window extends to Friday and we could see higher highs in the DJIA and SPX. The SPX will likely test its 200-dma or its downtrend line from the 1/4/22 high into Friday/Monday. This market is very treacherous to trade and we need to see an EW 5-waves down on the hourly chart before we think about a small short position. Crude oil tested our $75 target, reversed higher, and then pulled back into the exact New Moon today. Bitcoin bounced up to test16,400 on the exact New Moon. On a solar-lunar Big Range Day, gold pulled back to $1719 and then bounced to $1755. We are bearish on the PM sector. The USD tagged 108 and then pulled back on the New Moon to test the recent low at 105.34.
11/24/22 (Commentary for Thursday) The DJIA and SPX both took out their respective highs from 11/15 and turned us short-term bullish. After a consolidation from last week, the SPX has rallied with vigor into the 11/23-11/25 New Moon Timing Window. The Friday after the US Thanksgiving holiday is statistically bullish, so we expect the SPX to continue its rally and attempt the test its 200-dms at SPX 4060. The Positive Volume Reversal Day for the SPY on 11/18 and the TRIN-5 > 6.00 were positive indicators for the SPX to rally into the statistically positive 11/23-11/25 New Moon Timing Window. For tomorrow, we expect the SPX rally to continue. After a 3-wave bounce into Thursday night, Bitcoin appears to be rolling over again - an undercut low below 14925 is possible this week. Crude oil tested our target of $75 early Monday but only bounced higher in a 3-wave corrective manner - this is short-term bearish. Gold spiked down to $1719 early Wednesday before bouncing to $1755 late Wednesday - how we trade on the truncated Friday session will enlighten us. If the USD undercuts 105.34 on Friday, this will give us an EW 5-waves down on the hourly chart which is a SELL SIGNAL.
Big Picture on Stocks (UPDATED) – We were wrong about the short-term SELL SIGNAL in the SPX and the SPX could continue its rally into next week. Even so, the SPX could still give us a 20%-50% correction by spring 2023 - down to SPX 2400 - as the 20-yr stock cycle low bottoms and the US economy slows into a recession. The 13-month Fibonacci step out from the 1/4/22 SPX high and the 55-wk Fibonacci step out have us looking to early February for an important low. We favor a high percentage of cash for capital preservation.
Big Picture on PMs (UPDATED) – We still expect gold stocks to test their COVID lows by Fed/March 2023 as the 8-yr gold cycle and the 20-yr stock market cycle converge on the downside. Central bankers are loading up on gold this year and global physical inventories continue to decline but higher nominal US rates could still pressure the PM sector down.
Stocks – Both the DJIA and SPX have taken out their respective highs from 11/15 as they rallied into the 11/23-11/25 New Moon Timing Window. We could see the SPX rally continue on Friday and test the 200-dma at 4060.
Gold – Gold spiked down to $1719 early Wednesday and then rebounded to $1755 near the exact New Moon - how we trade on Friday will determine the short-term trend.
Silver – Silver gave us an EW 5-waves down on the hourly chart and a SELL SIGNAL on Monday - how we trade on Friday will determine the short-term trend.
Crude Oil – Crude oil tested our target of $75 but only rallied in a 3-wave bounce which is bearish.
Dollar Index – If the USD undercuts 105.34, this will give us a SELL SIGNAL.
TURNING POINT DAY
The turn window for this week is 11/21.
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