dinsdag 4 april 2017

Monday Market Observations

*) We are looking for a test of the SPX and DJIA highs going into 4/15 (Tax Day) as IRA contributions continue to boost the market higher in the short term. A failure to make new highs in the SPX and DJIA by 4/15 will be bearish in our view.
# The SPX finished an EW 5-wave advance into late Thursday, and we are now doing a small EW a-b-c correction into our 4/4-4/5 turn window which includes the 4/5 FOMC minutes. We are inclined to buy dips into the 4/4-4/5 Turn Window because of the strength of the FANG stocks (FB, AMZN, NFLX, and GOOG).
# Gold is giving us just a corrective bounce into 4/4, the 55-day Fibonacci step out from the 2/8 GDX high. This argues for another leg down after Tuesday. Weakness in the GDX/GLD ratio argues for more pullback in the PM sector after 4/4, the 55-day Fibonacci step out from the 2/8 Gold high. Patience.
# The SIL/SLV ratio (silver stocks/silver metal) looks weak here and forecasts a small C-Wave pullback in silver after 4/4.
# Crude oil only gave us a modest pullback on Monday. The aggressive sub-divisions higher on the hourly chart last week argue for a substantial bounce.
# US bonds looked strong Monday and the COTs are very supportive of an intermediate-term rally.
# The Dollar finished an EW 5-wave rally from early 3/27 into 3/30 and is tracing out an EW a-b-c correction on the hourly chart. This could pressure the PM sector after 4/4....