Market Observations for the Week: The SPX rallied on Monday and is holding up into the 11/25-11/26 turn window. We are taking profits in short-term trading positions in the PM sector. We are expecting big volatility into next week and raising more cash. We are monitoring a potential mini-crash pattern going into December for the SPX. The 34-day SPX Fibonacci step out on both the daily and weekly charts lands on 12/2 and that could be an important low after the 21-day SPX Fibonacci step out came in as a high on Wednesday’s close. We still view this stock market as in a bull market correction which could undercut 6500 by the first week of December. We are expecting a market turn by 11/25-11/26, the Tuesday after a monthly option expiration. We should also note that there is “positive seasonality” for the Friday after the Thursday Thanksgiving holiday in the US amidst our short-term bearish view. Our fractal models and cycle analysis pointed to a chance of severe volatility going into the last week of November and we are seeing it. Gold and silver are rallying into the 11/25-11/26 turn window (the Moon ingress into Aquarius) and also the Comex option expiration. Our current investment positions were updated on Friday’s close: 25% cash, 0% QQQ, 20% GDXJ/SILJ/XLE, 10% 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 Monday to include: 75% cash, 0% SLV, 0% GLD, and 25% Barrick.
TURNING POINT DAY
Our turn window for this week is 11/25-11/26.
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