Market Observations for the Week: The SPX, NDX and IWM opened December trading with a “Negative Volume Reversal Day” on Monday. The SPX made a low-volume test of an “overhead supply zone” on Friday and found resistance and could now see more decline down into the 12/3-12/5 Full Moon Timing Window. The SPX is also pulling back into the 12/2 turn window defined by the 34-day Fibonacci step out from the 10/29 SPX ATH at 6920. The 3-star critical reversal day on 11/28 for the SPX and gold appears to have come in as a HIGH. Stan Harley’s superb cycle work for the SPX argued for a correction low on the last week in November, but it appears to have come in on 11/20. The 34-day SPX Fibonacci step out on both the SPX daily and weekly charts lands on 12/2 and that could be an important turn day for the stock market. After a small correction here for the SPX and the PM sector, we are looking for higher prices for the SPX and gold into year end. Gold and silver also rallied into the 11/28-12/1 turn window turn after Comex option expiration last week and look stronger than the stocks here. Our current investment positions were updated on Friday’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 Monday to include: 25% cash, 25% SLV, 25% SILJ, and 25% Barrick.
TURNING POINT DAY
Our turn window for this week is 12/1-12/2 – the 34-day Fibonacci step out from the 10/29 SPX ATH.
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