All Star Market Timing

Folks,

Market Observations for the Week:   The SPX rallied initially on the NFP but then sold off after pondering the 3% year-over-year wage gains. Wave "b of B" down started and should run into the 11/6-11/7 New Moon Timing window which includes the 34-day Fibonacci step out from 10/3. We expect a post-election rebound in stocks by Wednesday afternoon.  We believe that the market has entered a bear market phase (SPX target ~ 2200) and that a potential crash pattern is still in play into late November after a recovery rally phase. 

11/04/18 (Commentary for Sunday)  The SPX got close to the 50% retracement level early Friday but we probably started a correction into our 11/6-11/7 New Moon Timing Window which includes our 34-day Fibonacci step out from 10/3 – a bounce to ES 2740 pre-market would probably be a good short. We expect some kind of market low early Wednesday (the New Moon is exact at 11:01 AM EST) before a post-election recovery rally starts to SPX 2820.  We are expecting a large 3-wave rally to make a 50%-61% retracement to SPX 2773-2812 by the 11/9-11/12 turn window if we continue to trace out "a potential crash pattern". Rising US rates may continue to plague US equities into 2019 but 5-waves down on the hourly bond chart is calling for a bounce on Monday. We believe that the October stock decline is signaling a growth slowdown in the US economy that could last into Q2 2019 while input costs appear to be rising across the board – a stagflationary economy may be at hand which could favor the PM complex. We believe that the 2016-2018 bull phase has come to an end and a correction of that 1100 SPX points move could be 600-800 points. We are also open to the idea that the stock bull market from March 2009 may have peaked but we are taking things one step at a time. We expect November to bring more volatility to global markets and weakening US economic numbers that could result in the Fed passing on a December rate hike. We have harped on declining financial liquidity for months here and believe that this is setting us up for a volatile ride into yearend for global markets and into the Spring – the one-two punch of Fed rate hikes and Quantitative tightening is too much for the markets to digest at one time. Crude oil continues to sub-divide down – rallies are sideways and corrective – this confirms that a high has been seen for the year. Gold rallied above the 100-day MA and gold stocks rallied hard above a declining wedge – just a corrective decline into the 55-day Fibonacci step out on 11/5 would be bullish for the PM sector. The USD could still test 97 again – but the Euro may have made an important low.

• Big Picture on Stocks (UPDATED) -  We believe that the SPX is correcting the 1100 SPX rally from 2/8/16 and the SPX could decline 600-800 points by late November with some SHARP RETRACEMENT RALLIES along the way. In the short-term, we expect a tradable low early Wednesday after the elections and a rally to test SPX 2800.
• Big Picture on PMs (UPDATED) -   Gold closed above the 100-day MA on Friday and the GDX broke out of a declining wedge. Just a corrective decline in the GDX into Monday's 55-day Fibonacci step out would be bullish.

• Stocks – After a positive open, the SPX started a pullback that could last into Wednesday morning after the elections and when the New Moon turn exact. Our turn window is 10/6-10/7 and includes the 34-day Fibonacci step out.
• Gold - Just a corrective decline into Monday would be bullish for gold and the gold stocks.
• Silver – Silver completed a wave 2 pattern on the daily chart Thursday and reversed up strong – just a corrective decline into Monday would be bullish.
• Crude Oil – Crude oil continues to sub-divide down even on a weak-USD day – we should see lower lows.
• Bonds – Bonds finished 5-waves down on the hourly chart and should see a bounce on Monday.
• Dollar Index – The USD traced out a head and shoulders bottom pattern on the daily chart with a target of > 97 – we may see another test of 97 on Monday.

TURNING POINT DAY

The turn window for this week is 11/6-11/7, which includes the New Moon Timing Window.