Market Observations for the Week: The SPX tried to correct on Tuesday but ended up reversing higher for the day – this is bullish behavior. Our Option Premium Ratio has now printed the last three closes: 0.72, 0.81, 0.66 which is a classic, bullish “island reversal pattern”. We are now short-term bullish on the SPX and expect a retest of the 10/29 ATH at 6920.34 by 11/19. The start of Mercury retrograde on 11/9 has failed to turn the SPX down which is bullish. Buying the SPY on dips appears optimal on pullbacks into 11/19. Gold and silver are bouncing in 3-wave corrections that have found resistance at the 0.50 retrace for gold and the 0.618 retrace for silver. We believe that oil stocks (XOM, CVX) should be acquired here on dips for the intermediate term. Our current investment positions were updated on Tuesday’s close: 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, 25% SLV, 25% GLD, and 25% GDXJ.
TURNING POINT DAY
Our next turn window is 11/10-11/11.
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