We are still on travel with limited access to the internet, so our reports will be brief.
Folks,
Market Observations for the Week: The Fed day on Wednesday came with a "dovish statement" which initially excited the markets but a hawkish press conference from Chairman Powell turned the tide down. The Fed is determined to bring inflation down and will keep raising rates until something breaks in the global financial markets. The NFP jobs report on Friday came in stronger than expected but the bulls saw something they liked in the wage growth numbers and the SPX closed positive for the day. Still, our technicals and astro-finance work arues for a high early this week and then a potential decline into the Full Moon Timing Window on 11/8-11/10. Our EW count on the daily chafrt from the 1/4 high shows a potential 1-2, i-ii count that indicates a potential 3rd wave down may be in play and this possibility must be respected. Bitcoin held above 21000 again Friday which is a positive for the market. Both the SPX and gold pulled back into the NFP jobs report and rebounded on Friday after the report was released.
11/06/22 (Commentary for Sunday) The SPX and gold declined into the key NFP jobs report and then rallied on the news on Friday. The market is now entering one of the most important weeks of the year in terms of astro-finance and the mid-term elections. The EW count of the daily SPX chart is showing a possible nested 1-2, i-ii pattern that could indicate that we are either in a 3rd of a 3rd wave down or a 3rd of a C-wave down. We have a 3-star critical reversal day for the SPX on 11/9 - if the SPX can rally to a higher high than 3911, this could mark an important HIGH. However, it appears to us that SPX 3911 was an important high last week, and we are heading down into an important low in the 11/8-11/10 Full moon Timing Window which includes a lunar eclipse. So, we are looking for an important low around 9/9 and then a reversal higher in the SPX as we pass through the hurricane of astro-finance aspects coming this week. We are expecting big volatility this week in the SPX and traders will need to be agile around the 11/8 mid-term US election which could be fraught with drama. These are treacherous markets, and we prefer to stay in 100% cash beyond our physical metals position. Bitcoin has closed above key resistance at 20000 on Friday and that is encouraging to the bulls. 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%-5market 0% correction by spring 2023 - down to SPX 2400 - as the 20-yr cycle low bottoms and the US economy slows to 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 did bounce after the NFP jobs report on Friday, but the trend still looks down into the 11/8 mid-term elections. The negative EW pattern of the SPX daily and the confluence of astro-finance aspects have us looking for a "hard landing" in the 11/8-11/10 Full Moon Timing Window + lunar eclipse before a sharp reversal higher.
Gold – Gold gave us an undercut low to $1618 early Thursday and then bounced up to test $1680 on Friday after the NFP jobs report - just a corrective pullback to the 11/8 Full Moon would be bullish.
Silver – Silver tested $21 on Friday - just a corrective pullback to the 11/8 Full Moon would be bullish.
Crude Oil – Our view remains that the OIH (oil service) stocks are leading crude oil higher for its next leg higher - if the SPX continues its decline into the 11/8-11/10 turn window, we will be inclined to buy SLB or XOM on dips.
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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