Folks,
Market Observations for the Week: In a “reversion to the mean trade”, the SPX pulled back into the 11/5 Full Moon and generated some fear signals from the $TRIN and VIX that correlate with a SPX low early Wednesday. The SPX 3-star critical reversal window for 11/3-11/5 and the Full Moon Timing Window 11/4-11/6 argued for big volatility this week and we are getting it. The Supreme Court decision on the Trump emergency tariffs on Wednesday could also bring some volatility to the market. After three days of a trading range above its Bollinger Bands last week, the SPX and NDX are giving us a “reversion to mean” trade down in the first week of November. We are inclined to buy the dip in the SPX and our favored energy stocks XOM/CVX/SLB which look poised for outperformance in early 2026. The CPI inflation report for October looked 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 pulled back into 10/4-10/6 Full Moon Timing Window and we should see at least a bounce here. We believe that oil stocks (XOM, CVX) should be acquired here on dips for the intermediate term. Crude oil and the XLE look very undervalued compared to the PM sector. Our current investment positions were updated last week: 15% cash, 5% QQQ, 20% GDXJ/SILJ/XLE, 15% XOM/CVX/SLB and 20% physical gold/silver/platinum. We have a 25% overall allocation to our short-term trading account which was last updated on Tuesday to include: 25% cash, 0% SLV, 25% GLD, 0% IWM, 25% ETHA and 25% XOM/CVX/SLB.
TURNING POINT DAY
Our next turn windows are 11/3-11/4 which is a 3-star critical reversal day and the 11/4-11/6 Full Moon Timing Window.
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