Market Observations for the Week: The SPX and NDX rallied on light volume Friday and tested some overhead “supply zones”. The market is now set for a pullback into the 12/1-12/2 turn window defined by the 34-day Fibonacci step out from the 10/29 SPX ATH at 6920. The CBOE put/call ratio spiked to 1.39 on Friday and the 3-star critical reversal day for 11/28 for the SPX appears to have come in as a HIGH for the SPX. 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. Our fractal models and cycle analysis now point to higher prices for both the SPX and gold into year end. Gold and silver also rallied into the 11/28 turn window turn after Comex option expiration last week. 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 Friday to include: 25% cash, 25% SLV, 25% CDE, 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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