Market Observations for the Week: The DJIA made a new high on Wednesday, but the SPX, NDX and IWM failed to confirm it. In fact, the IWM tested the 0.618 retrace to its ATH and reversed down. The Option Premium Ratio printed a bullish “island reversal pattern” into Tuesday and that resulted in a new ATH in the DJIA at 48431.57. The SPX tested its 0.786 retrace and still has a chance of a new ATH going into the 11/19 New Moon, but we are turning cautious. Our fractal models and cycle analysis point to a chance of severe volatility going into the last week of November. Gold and silver are bouncing in 3-wave corrections but got boosted by the talk of passing out individual checks again from a Trump administration. Silver has rallied to a new ATH at $54.415 overnight Wednesday, but we have a fractal turn window on 11/14-11/17 for gold and 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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