All Star Market Timing

Folks,

Market Observations for the Week:   We expect the SPX to be rallying on a "grid-lock election" outcome on Wednesday – cycles look strong into 11/12 and we have a target of SPX 2820 to complete the recovery rally. Overall though, we believe that the market has entered a bear market phase (SPX target ~ 2200 by December) and that a potential crash pattern is still in play into 11/27 after the recovery rally phase ends. 

11/06/18 (Commentary for Tuesday)  We got our grid-lock election outcome and expect a  rally to start Wednesday that could reach SPX 2820 by 11/12. On Tuesday, the SPX held up and we avoided filling the "up-gap" from 10/31. However, we did get a "gridlock outcome" Tuesday night which tends to be market bullish and we expect the SPX to be rallying by Wednesday afternoon. 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.  After the recovery rally ends around 11/12-11/13, we are looking for the next leg up in the US Ten Year to 3.5% and that should lead the next leg down into late November. 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 should 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 late November to bring more volatility to global markets and weakening US economic numbers that could result in the Fed pausing on raising rates. In fact, the Fed may have to react to a global financial panic with an emergency rate cut (ala Greenspan in Oct 1998) or a liquidity injection (QE). 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 (QT) is too much for the global 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 stocks finished a 5-wave rally from Thursday on Monday's 55-day Fibonacci step out from the 9/11 – just a corrective decline into tomorrow's New Moon would be bullish for the PM sector. The USD could still test 97 again – but the Euro is breaking out.

• 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 2820 by 11/12-11/13.
• Big Picture on PMs (UPDATED) -   Gold stocks finished a 5-wave rally pattern from 11/1 on the hourly chart on the 55-day Fibonacci step out from 9/11 – just a corrective decline the 11/7 New Moon would be bullish.

• Stocks – We got our "gridlock scenario" Tuesday night and expect a rally to start by Wednesday afternoon with a target of SPX 2820 by 11/12-11/13.  
• Gold - The GDX finished a 5-wave rally from Thursday on today's 55-day Fibonacci step out from 9/11 – just a corrective pullback into tomorrow's New Moon would be bullish.
• Silver – Silver completed a wave 2 pattern on the daily chart on 11/1 and reversed up strong – we just got a 3-wave pullback into the 55-day Fibonacci step out from the 9/11 low which is bullish.
• Crude Oil – Crude oil continues to sub-divide down – the gold/crude oil ratio is breaking out and supports a rally in gold.
• Bonds – Bonds finished 5-waves down on the hourly chart and got a 3-wave bounce into today – we are looking for an interest spike to 3.5% on the US Ten year that will pressure stocks into another down leg after 11/12-11/13.
• Dollar Index – The USD may try to hold up into the FOMC minutes on Thursday but the Euro is breaking out.

TURNING POINT DAY

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