Market Observations for the Week: The SPX declined in just 3-waves into Fed Wednesday and then rallied to test 6900 after Chairman Powell’s press conference – the Fed announced both a $40B QE to dampen volatility in the repo market as well as a 25 bps rate cut in the Fed rate – this is BULLISH. Our Option Premium Ratio has given us a series of bullish “island reversal’ patterns that argues for a new ATH in December soon. 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 early on 11/20 at the NYSE market breadth low. Silver gave us an ATH at $62 overnight Tuesday and then gave us just a shallow pullback into Fed Wednesday before rallying to test $63 overnight. The January fractal patterns for the SPX and silver argue for more rally into year end. Our current investment positions were last updated on the 11/28 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 Wednesday to include: 25% cash, 25% SLV, 25% SILJ, and 25% Barrick.
TURNING POINT DAY
Our turn window for this week is 12/10 – Fed Wednesday.
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