Folks,
Market Observations for the Week: The SPX made a high for the week in the 12/26-12/27 Full Moon Timing Window and then started a an EW a-b-c correction into Friday. We are still looking for the SPX rally to continue into January. The SPX made a rally high in the 12/26-12/27 Full Moon Timing Window and that statistically implies a higher high by the 1/11/24 New Moon. Our bias is for the SPX to continue its blow off on 1/2, the first trading day of 2024. The year 2024 is the fourth year of the Presidential Cycle and is statistically very bullish. However, our work and other work we respect point to the 1/11/24 New Moon as a potential important high for the SPX in Q1. We have a potential target of SPX 5100 by the 1/11-1/12 New Moon Timing Window – this could be followed by a 10% correction into March. We have to be aware of an important peak earlier than 1/11/24 and perhaps later in January but an important peak looks likely. The NYSE composite has a two-year cycle that is due by mid-January before a steep correction into March. The 10-yr US rate does not seem to want to reverse higher and this is needed for a substantial SPX correction. The VIX just gave us a weak, corrective bounce on Friday and looks like it's in a pattern to test the lows at 11.85 by early January. We still have shares of SPXS, SQQQ and TZA – we're hanging on to these short shares for potential hard selling by late January. We prefer to remain 75% in cash that is paying us a risk-free 5% while using small amounts of funds to trade good setups. Our current positions are 5% natural gas (UNG), 75% cash and 20% physical gold, silver and platinum.
12/29/23 (Commentary for Friday) The SPX made a high in the 12/26-12/28 Full Moon Timing Window and gave us an EW a-b-c correction into Friday – we could see more correction into 1/2 and perhaps an undercut low before bouncing. Farther out, we could see a test of SPX 5100 and gold $2188 by 1/8-1/11 in a final blow off. The US 10-yr rate remained in its down trend into Friday's close on the back of a very well bid US 10-yr note auction on Tuesday that drove the 10-yr US rate down to 3.785%. We're looking to sell our SPXS, SQQQ, and TZA bearish shares on a possible correction in the second half of January. Crude oil pulled back in an EW a-b-c correction to test $71.33 on Friday.
Stocks (UPDATED) The trend of the 10-yr US rate remained down into Friday's close – we need to see an impulsive reversal up on the TNX to get a bigger SPX correction in price and time.
Big Picture on PMs (UPDATED) Gold tested $2099 Wednesday evening and continued its C-wave down of an EW a-b-c correction into Friday, 12/29 – we are now looking for a correction low on 1/2 and then a reversal higher.
Stocks – The SPX pulled back in an EW a-b-c correction into Friday, 12/29. We are now looking for the correction to end by 1/2 and then we will see a test of the ATH at 4816 by 1/5.
Gold – Gold tested $2099 Wednesday evening and is now pulling back in a C-Wave that could last until 1/2. We have a potential target of $2188 by 1/11/24.
Silver – We expect silver to end its correction by 1/2 and then bounce above $24.85 by 1/5.
Bonds – After a well-bid 10-yr US note auction on Tuesday, bonds rallied up to test 125'30 Wednesday and then pulled back in an EW a-b-c correction to 124'16 on Friday.
Crude Oil - Crude oil spiked higher to $76.22 on Tuesday's Full Moon before pulling back to test $71.33 on Friday.
Dollar Index – The USD broke important support at 101.17 early Thursday but then rallied to close at 101.38 on Friday – more rally is possible early on 1/2.
TURNING POINT DAY
The turn window for this week is 1/2.
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