Folks,
Market Observations for the Week: The SPX blasted to a new ATH again at 6877 as the good tariff news on China gave us a “gap and go” day higher on Monday. So far, October has only given us two bad selling days on 10/9-10/10 (a wave 4) and now we are in a wave 5 that could test 7000 sooner than later. If Fed Wednesday gives us a surprise selloff, we are inclined to buy the dip in IWM and in our favored energy stocks XOM/CVX/SLB/APA. Still, the CPI inflation report on early Friday is worrisome to us and we prefer the commodity stocks here as early 2026 could bring some strong inflationary pressures. Low grain and crude oil prices could be reversing higher now and that should put even more heat on the consumer in 2026. Gold and silver may see a trading low on Tuesday when the Moon ingresses into Aquarius. How the PM sector reacts after Fed Wednesday will be enlightening to us since we are expecting a strong bounce in an ongoing consolidation. We believe that oil stocks (XOM, CVX, COP, APA) should be acquired here on dips. Crude oil and the XLE look very undervalued compared to the PM sector. Our current investment positions have been updated: 15% cash, 5% QQQ, 20% GDXJ/SILJ/XLE, 15% XOM/COP/CVX and 20% physical gold/silver/platinum. We have a 25% overall allocation to our short-term trading account which was last updated on Monday to include: 50% cash, 0% SLV, 0% GLD, 25% IWM, 0% ETHA and 25% XOM/CVX/SLB/APA.
TURNING POINT DAY
Our next turn window is 10/28-10/29, which is Fed Wednesday.
Leave a Reply