We are still on travel with limited access to the internet, so our reports will be brief.
Folks,
Market Observations for the Week: How the market reacts to the CPI report will set the tone for the SPX into next week. Fallout from the FTX fiasco continued to pressure the market today as the market digested the absence of a "Red Wave" in the US mid-term elections last night. Some kind of correction low is due in the 11/8-11/10 turn window but we are not chasing the downside here. Bitcoin's plunge below 16000 continued to pressure the SPX. A symmetry correction in the SPX from SPX 3911 would take us down to 3650 in case of a very hot CPI report.
11/09/22 (Commentary for Wednesday) More FTX fallout and "The Red Wave" that never was plagued the stock market today but it is clear that the CPI report will set the market tone into next week. We could see a lot of volatility on Thursday - our bias has us looking for a SPX low and a reversal higher by the close. The TRIN closed at 2.51 which statistically correlates for a rally day on Thursday after the CPI report. If the SPX does fall into early Thursday, our favored groups to buy will be the oil stocks and maybe AAPL. Bitcoin's continued plunge below 15000 Wednesday night is a bearish tell for the SPX. Crude oil pulled back to $85.85 Wednesday evening. Gold rallied up to test $1726 in the Full Moon Timing Window. The market is now entering one of the most important weeks of the year in terms of astro-finance and the mid-term elections - how the market handles the CPI report tomorrow is key and will set the tone into next week. We are expecting big volatility tomorrow in the SPX and traders will need to be agile. The 10-yr US rate has only corrected in 3-waves on the hourly here and its trend is still higher which is a risk to the SPX and PM sector.
Big Picture on Stocks (UPDATED) – Longer term, the SPX could give us a 20%-50% correction by spring 2023 - down to SPX 2400 - as the 20-yr cycle low bottoms and the US economy slows into a recession. The 13-month Fibonacci step out from the 1/4/22 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 as global physical inventories continue to decline but higher nominal US rates can still pressure the PM sector down.
Stocks – The SPX started a B-Wave early Thursday that may have peaked today at 3860 - we may have started a C-Wave down into the 11/8-11/10 turn window with a symmetry target of SPX 3750.
Gold – Gold gave us an undercut low to $1618 early Thursday and then bounced up to test $1720 on today's Full Moon - a fast $100 gain. Is this the start of a bigger rally? How we trade after the CPI report will tell us.
Silver – Silver took out $21.50 - just a corrective pullback after the CPI report would be bullish.
Crude Oil – Crude oil continued to fall into $85.85 late Wednesday.
Dollar Index – The USD has only given us a 3-wave correction from 10/20 - we could test the recent highs near 114 by next week.
TURNING POINT DAY
The turn window for this week is 11/8-11/10, and this includes a Full Moon/lunar eclipse,
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