Market Observations for the Week: The SPX continued to decline on Wednesday, may have finished an EW a-b-c correction on the hourly chart, and triggered a SPY “reversion to mean” system that we follow to the BUY side. We were early on our bullish call on Tuesday night but are now looking for the SPX to rally into the 12/19-12/22 New Moon Timing Window and make a new ATH above 6920. The CPI inflation report early Thursday should be a market catalyst. The Fed announcement of both a $40B/month QE to dampen volatility in the repo market as well as a 25-bps rate cut in the Fed rate is “bullish juice” for the SPX going into 2026. However, stock selection will be key going into 2026, and we will continue to favor commodity stocks and DJIA stocks. The Option Premium Ratio rose from 0.50 to 0.80 on Wednesday’s close and this looks like the setup for another bullish “island reversal” pattern, which is short-term bullish for the SPX. Silver made a new ATH at $67.16 near Wednesday’s close, just a pullback into the 12/19-12/22 New Moon Timing Window would be bullish. The Mars ingress early Monday only gave us a brief consolidation in the PM sector, and the January fractal patterns for the SPX and silver call for more rally into yearend, 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 12/15 to include: 25% cash, 25% SLV, 25% SILJ, and 25% Barrick.
TURNING POINT DAY
Our turn windows for this week are 12/15-12/16 and the 12/19-12/22 New Moon Timing Window.
Leave a Reply