Folks,
Market Observations for the Week: The NDX made a new ATH early Friday before Trump’s threats to raise tariffs to 100% against China sank the markets. We had warned about the expectation of extreme volatility in the 10/10-10/13 3-star critical reversal time window, and we got that. The Doji candlestick for the IWM on 10/3 and the breakdown of ETHA (Ethereum) early on Thursday gave us an early warning of a news-related decline. Both the SPX and NDX had made the minimal 5th wave pattern completion from the 8/1 low, and we had raised our cash levels accordingly. Some serious lunar spiral calendar cycles came into play starting on 10/10 and continue into early this week. As we have harped on repeatedly, when the SPX fails to give us a decent pullback in September, we are wary of the following October – especially the second half. We ARE IN OCTOBER now and have continued to raise our stops and cash levels for a potential 10% correction later in the month. What to do now? Gold is rallying to a new ATH Sunday evening at $4096 and the ES and NQ are rallying to a 50% retrace of Friday’s decline. The market is extremely sensitive to the news flow from the White House and China here on the trade standoff. We could see a “dead cat bounce” in the SPX and NDX play out into Tuesday before a retest of Friday’s low. We plan to sit on our hands Monday and watch price action on the SPX, NDX and IWM and look for a turn window on Tuesday. In the longer term, the GDX could test $90 by December, and silver could CLOSE above its ATH at $50 by mid-October. Our current investment positions are: 25% cash, 5% QQQ, 25% GDXJ/SILJ/REMX and 20% physical gold/silver/platinum. We have a 25% overall allocation to our short-term trading account which was last updated on Thursday to include: 100% cash, 0% SLV, 0% GLD, 0% SILJ, and 0% QQQ.
TURNING POINT DAY
We have a window for this week on 10/14.
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