Market Observations for the Week: The SPX gave us a 3-day rally day into Tuesday and we are up into early Wednesday – our Option Premium Ratio gave us an “Island Reversal pattern” on the close of Tuesday and that has turned us short-term bullish – this signals a retest of the SPX ATH at 6920. The 3-day critical reversal day for 11/28 for the SPX and gold looks like a HIGH. Stan Harley’s superb cycle work for the SPX argued for a correction low THIS WEEK, but it may have come in last week. The 34-day SPX Fibonacci step out on both the daily and weekly charts lands on 12/2 and that could be an important turn day after the 21-day SPX Fibonacci step out came in as a high on the 11/19 close. We should also note that there is “positive seasonality” for the Friday after the Thursday Thanksgiving holiday in the US. Our fractal models and cycle analysis pointed to a chance of severe volatility going into the last week of November and so far, that volatility is HIGHER. Gold and silver are rallying into the 11/28 turn window6 turn after Comex option expiration. Our current investment positions were updated on Tuesday’s close: 20% cash, 5% 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 Tuesday to include: 25% cash, 25% SLV, 25% GLD, and 25% Barrick.
TURNING POINT DAY
Our turn window for this week is 11/28 – a 3-star critical reversal day.
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