Monthly Outlook Update (10/30/15)

Stocks, Bonds, USD, Gold - key intermediate term scenarios to watch
Stocks
The recovery in SP500 off its double bottom has been very strong with only shallow pullbacks (Chart S1) and the Nasdaq100 is practically at new recovery highs (Chart S2).

Despite this bullishness, the disparity along the market-cap dimension is remarkable (Chart S3) and The 9% and the 90% (10/23/15)), raising the possibility that this recovery is of a corrective nature. If so, the blue and red paths in Chart S4 are potential candidates for what's happening at a larger degree.

Bonds
Long term, the 10-year US Treasury yield index may be forming a 4-year head-and-shoulders pattern (Chart B1, gray neckline). Under this interpretation, the right-shoulder formation is in progress at the moment.

Near term, the yield index has also formed a 1-year head-and-shoulders pattern.  This pattern is potentially failing as yields have bounced off trend channel support and but is approaching resistance.  See Chart B2.

The 5-year and 1-year head-and-shoulders patterns resemble each other.  We would not be surprised if both fail. However, near-zero 10-year yields would be the consequence if these HS patterns reach their projected target!

USD
The USD index formed a higher low over the past month and has advanced smartly since then. At the same time, it has been capped by the downward trendline on the monthly chart and is yet to achieve a higher high (Chart $1).

As such, it is not clear if the green wave 4 in Chart $1 is complete. Near term, two potential bearish scenarios are worth mentioning (Chart $2).  The first scenario is a complex wave (X)-blue and the second a wave [ii](or B)-red following a leading diagonal triangle wave [i](or A)-red.

Gold
The 2015 low in Gold is a candidate for a bottom in Gold price (Chart G1, green C). While it is possible to interpret the round as a series of first and second waves (Chart G2, green)  or as an impulse wave with an oversized wave four triangle (Chart G2, blue), price action has not been convincingly impulsive.

The red 5 and blue C in Chart G1 remain strong candidates for the bottom in Gold prices. The lower blue trend-line offers potential support as well as a capitulation mark.

Market Timing Update (10/29/15)

Market Timing Update (10/28/15)

[EOD] Stocks -
Large caps are approaching the high end of previous topping range and hinting at new all-time highs. Mid-to-small caps are at the verge of venturing into their previous topping range. The divergence between the 9%-and-90% persists. See charts.

Market Timing Update (10/27/15)

[EOD] Stocks -

[735am] ES update -

Market Timing Update (10/26/15)

[EOD] Stocks -

MTU Weekend. Ed. -The 9% and the 90% (10/23/15 close)

SP500 returned to its previous topping zone following a gap above the critical resistance (Chart 1). We count the current upswing from the September low as wrapping up wave A (green), wave 3 (green), or wave [v] (blue).

Whether this is the start of wave five off the 2009 bottom or a counter trend rebound (even if there is a minor new high) is the obvious question. We cannot help noticing the exceptional strength in large-cap stocks (the 9%) vs the rest (the 90%) (Chart 2). At the moment, the midcaps and smallcaps have only recovered 50% of the their lost ground and are still below their previous topping zones. This divergence is likely to end soon, as a result of either broader participation in the rally or an underperformance of the large-caps (or worse).

With respect to the 2009 bottom, the current upswing is consistent with the top scenarios highlighted in Chart 3.

Market Timing Update (10/23/15)

[955am] SPX update-
Tracking counts and technicals. See chart.

Market Timing Update (10/22/15)

[EOD] Stocks update -
SP500 closed above multiple resistance levels, and just under its MA200 (Chart 1) as well as the limit of a potential EDT (Chart 2). The advance in Futures after the close appears to challenge the EDT.

[1130am] SPX update -
Potential EDT on the daily chart. See charts.

Market Timing Update (10/21/15)

[EOD]Stocks -
A pullback is now in progress. See charts for potential support levels.

[1150am]SPX update -
Potential bear flag and HS. See chart.

Market Timing Update (10/20/15)

[EOD] Stocks -
SP500 finally filled the gap around 2035. The red trend-line, the horizontal purple band, the green trend-line as well as the MA200 (currently at 2060) now all act as potential resistance. See chart.

Market Timing Update (10/19/15)

[EOD] Stocks-

MTU Weekend Ed - Critical Resistance (10/16/15 close)

SP500 has now retraced a Fib-0.618 of the decline from its July high and is now approaching critical resistance (Chart 1).  Other indexes are lagging (with the exception of the Dow) (Chart 2).

Market Timing Update (10/15/15)

[EOD] Stocks -
SP500 made another rebound high. Today's strength is led by large caps while smaller caps are yet to make higher highs (Chart 1). Many indexes are now at or approaching some kind of neckline resistance.  Either a reaction or an overnight gap is probable. (Chart 1)

SP500 rebounded from a confluence of support levels (including its MA50) and is once again at a prior resistance line that has frustrated two break out attempts (Chart 2).

The overhead gap at 2035 (Chart 2) is likely to be filled this time if today's mini-spike is part of the next impulse wave or even wave five of the current upswing (Chart 3, green [i], gray [v]).

[215pm] SPX update -
Squiggles and technicals. See charts.

Market Timing Update (10/14/15)

[315pm] SPX update -
SP500 is testing MA50, likely approaching (initial?) support. Gaps above and below are competing for attention. See charts.

Market Timing Update (10/13/15)

[EOD] Stocks -
Today's high in SP500 was marginally above its Sept rebound high. Today's high is likely either the end of the current upswing (bullish initial or bearish ending) or wave B of a small-degree expanded flat. See chart.

Market Timing Update (10/12/15)

[EOD] Stocks -

[1130am] SPX update -
There are now enough waves in place to entertain these two squiggle counts from the September low in SP500. See chart.

MTU Weekend Ed. - Flat or Triangle Wave Four (10/9/15)

The rebound from the September retest low SP500 has once again regained its 2015 pre-crash range on the current rebound from its September retest low. It also sits between its MA50 and MA200, as well as just below a trend-line resistance. See Chart 1.

We expect the downward gap around 2035 and the upward gap around 1953 to be filled. While most indexes are still marginally below their September rebound high, the Dow is comfortably above it. This bodes well for the 2035 gap to be filled during this upswing.

It's unclear whether the current rebound serves to complete a bearish wave X or represents the initial wave of a larger upswing (Chart 2). Perhaps key tracking counts from the 2009 bottom can help put things into perspective. See Chart 3.

Under the interpretation that the 2015 pullback is a wave [4] off the 2009 low (or the 2010 low), one possibility is that wave [3]-up ended in mid-2014 at 2019.26 in SP500. In that case, wave [4]-down either ended in 2015Q3 in a flat-like structure (Char3, green [4]) or wave [4]-down will likely end soon in a triangle (Chart 3, blue [4]).  The proposed wave [4] alternates well with the wave [2] pullback.

Market Timing Update (10/9/15)

[EOD] Stocks -

Market Timing Update (10/8/15)

[EOD] Stocks -
A five-wave upswing (Chart 2) brought SP500 to the previous breakout-failure trend-line (Chart 1). The current upswing counts as [i], A or C depending on one's perspective (Chart 3).