Folks,
Market Observations for the Week: The SPX rallied into the 11/23-11/25 New Moon Timing Window and made highs for the week at 4034.02. Our short-term bias is for more rally early Monday before some post-New Moon corrective action. However, our TRIN-5 indicator is neutral at ~ 5 and the VIX appears to have a lower target below 18. Our bias is for higher DJIA and SPX prices into 12/8 or so which is close to our next 3-star critical reversal day on 12/6. The closing spike of the CBOE equity put/call to 1.36 on Wednesday is another "bearish excess" data point that keeps us looking for higher levels in the SPX and DJIA. The SPX will likely test its 200-dma or its downtrend line from the 1/4/22 high before the rally from 10/13 tops out. 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 appears to be targeting our next level at $70. Bitcoin held up into the New Moon Timing Window but looks ready to reverse lower to our target below 10000. Breaking below 105.34 would be short-term bearish for the USD and a boost for the PM sector.
11/27/22 (Commentary for Sunday) The DJIA and SPX both took out their respective highs from 11/15 and turned us short-term bullish - they are also both making higher highs after the 34-day step out from 10/13 which is bullish for higher prices. After a consolidation from last week, the SPX has rallied with vigor into the 11/23-11/25 New Moon Timing Window and could hold up more into Monday before a brief pullback. After a corrective bounce into the 11/23-11/25 New Moon Timing Window, Bitcoin appears ready to be roll over again - our year-end target is under 10000. Crude oil tested our target of $75 early Monday and then only bounced higher in a 3-wave corrective manner into the New Moon- this is short-term bearish. Gold rallied on Friday and tested $1769 - the slumping crude oil price does help the profitability of gold and silver producers. If the USD undercuts 105.34 on Friday, this will give us an EW 5-waves down on the hourly chart which should boost the PM sector.
Big Picture on Stocks (UPDATED) – We were wrong about the short-term SELL SIGNAL in the SPX last week 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 to Monday before a brief correction.
Gold – Gold rallied to $1769 on Friday into the New Moon Timing WIndow - how we trade on Monday will set the short-term trend.
Silver – Silver gave us an EW 5-waves down on the hourly chart and a SELL SIGNAL on 11/21 - how we trade on Monday will determine the short-term trend.
Crude Oil – Crude oil tested our target of $75 but only rallied in a 3-wave bounce into the New Moon 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 11/28.
Comments