Saturday, December 3, 2016

MTU Weekend Ed. - Monthly Outlook Update (12/2/16)

Stocks, Bonds, USD, Gold - key intermediate term scenarios to watch

SP500 is completing a seven-wave advance since its 2016 low (Chart S1 and Chart S2). Four potential structures are in play, with each fitting nicely into the larger price structure since the 2009 bottom (Chart S3).

 [1] A corrective advance since the 2016 low is ending, potentially in the form of a double zigzag (7 waves).

[2] The post-Brexit upswing may morph into an ending diagonal triangle (Chart S1 gray lines).

[3] Wave number 7 may impulse higher as a small-degree 3rd wave

[4] The upswing since the 2016 low may morph into a larger ending diagonal triangle (Chart S1 green lines)

 Scenarios [1] and [2] are consistent with the red and blue trajectories in Chart S3, while scenarios [3] and [4] are consistent with the green wave [5] in Chart S3.

The cycle low in yields may indeed have arrived in 2016 (Chart B1-blue). If the sell-off in bonds fizzles, the red trajectory tracks a retest of the yield low. Chart B2 offers additional details of such a potential retest.

The USD index is approaching potential resistance at a Fib-61.8% retrace of its depreciation between 2001 and 2009 (Chart $1). This area also corresponds to the resistance zone around 1998.
The sell-off in Gold has sent price to potential near term channel support (Chart G1) and a Fib-61.8% retrace (Chart G2). Chart G2 tracks details of the two key scenarios, the blue count and the red count in Chart G1.