Saturday, October 29, 2016

MTU Weekend Ed. - Monthly Outlook Update (10/28/16 close)

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

Price actions in SPX over the past two-years have failed to resolve the ambiguity whether a fourth wave pullback (Chart S1-red/blue) is still completing or a fifth wave is already in progress (Chart S1-green).

For the near term, a probe for the gray breakout line in Chart S1 and the 200DMA around 2075 for potential support looks probable. A successful probe would complete a potential 7-wave corrective pullback shown in Chart S2.

Odds would favor the bullish wave 5 if SPX can stay above the gray breakout line. Note that seasonality is very bullish for the rest of the year. Chart S3 offers an average 10% upswing in Q4 in year-6 of the decennial pattern. A decisive breach of the gray line would invite a deeper retrace toward many unfilled upward gaps and perhaps with similar potential of the decennial pattern to the downside (inversion).

With October's 30bp rise, the UST-10Y yield index has taken on the shape of a diagonal triangle since its July low (Chart B1) and is approaching price and pattern resistance (Chart B2). A retrace around current levels looks probable. A new low in yields, if materialized, would complete yet another contracting EDT (Chart B3).

The thick green line has served as a strong support for the USD index since its 2015 high (Chart $1). The current rebound is either the green wave 5 or another retrace to the upper end of its two-year range. Note that the USD index is approaching price and pattern resistance. Unless a convincing higher high is made (by a small-degree 3rd wave), a reversal looks probable (Chart $2).

At its 2016 rebound high of 1377.50, Gold either completed a bearish upward flat (or wave [1] of its wave C-up to a lesser extent) as indicated by Chart G1-red, or the initial upswing (wave A-up or wave 1-up to a lesser extent) as indicated by Chart G1-blue. In the near term, a probe of the gray "base channel" line around 1150 for potential support appears probable, with potential for more to new lows (RED) or a rebound to challenge the upper gray "base channel" line (BLUE)

Friday, October 28, 2016

Market Timing Update (10/28/16)

[EOD] Stocks -
A red October. Today's violation of the neckline and decline (which fell short of the HS target, and closed below the neckline) may or may not be enough for a probe of the blue line (as discussed yesterday). More analysis to come in the weekend commentary. See chart.

Thursday, October 27, 2016

Market Timing Update (10/27/16)

[EOD] Stocks-
SPX is probing the red neckline of a potential HS pattern (Chart 1), for a test of the blue and the pink lines below. If the neckline holds, another upward attempt (Chart 2 pink and green tracking counts) at the overhead resistance (green and pink lines) and the overhead gap in Chart 1 looks probable.

Tuesday, October 25, 2016

Market Timing Update (10/25/16)

[EOD] Stocks -
SPX filled yesterday's gap as we have discussed with the green line and its MA50 as overhead resistance (Chart 1). Chart 2 tracks potential diagonal triangles and Chart 3 tracks near term trajectories.

Monday, October 24, 2016

Market Timing Update (10/24/16)

[EOD] Stocks-
NDX makes a new high today but remain ambiguous in terms of bias.
SPX gaped and closed above the green line (Chart 1), but below its MA50 (Chart 2). Today's upward gap around 2140 is vulnerable to being filled before the downward gap above around 2165, until SPX can close above MA50 and the red line in Chart 2.
Two potential diagonal triangles (discussed in the weekend commentary) remain on the table (Chart 3). See charts.

[735am] ES update-
Interesting formation. See chart.

Friday, October 21, 2016

MTU Weekend ED. - Three Potential Diagonal Triangles (10/21/16)

Price actions since the August all-time high in SP500 now present three potential (leading or ending) diagonal triangles (DT) at three different degrees, which can partially account for the messy waves since then. See Chart 1.

[blue - the big DT] A contracting DT. In this case, SPX can rise to the upper blue line before reversing.

[red - the medium DT] An expanding DT. SPX is likely to hit the lower red line for its wave E-down.

[green - the small DT] An expanding DT whose detail is shown in Chart 2.

Of course, there are other options for us to keep an open mind. Chart 3 updates.

Market Timing Update (10/21/16)

[325pm] SPX update-
Squiggles deserve an update. See chart.

[110pm] SPX update-
Squiggles from this week's high and near term tracking counts update. See charts.

[920am] ES update-
Pre-market break of a potential HS pattern, which projects a test of the 2105-2110 area if it is not a fake breakdown. See chart.

Thursday, October 20, 2016

Market Timing Update (10/20/16)

[EOD] SPX update-
Very little net progress. See charts.

[1050am] SPX update-
Bull/bear squiggles (Chart 1) and reaction at the green line and potential gap-fill and test of the blue line (Chart 2).

[835am] ES update-
ES is wedging or coiling depending on the perspective. ES has now satisfied the requirement for the red D if an expanding DT is in play. See chart.

Wednesday, October 19, 2016

Market Timing Update (10/19/16)

[EOD] Stocks-
SPX struggled with the green line as discussed yesterday (Chart 1). Chart 2 tracks the near term squiggles. In addition, the potential gray triangle in Chart 2 corresponds to the green wave C(C) in Chart 3

Tuesday, October 18, 2016

Market Timing Update (10/18/16)

[EOD] Stocks -
Overall, it looks like a weak upward gap in SPX today - no higher highs and reaction at the green line resistance (Chart 1). As long as the green line holds, a probe of the green line in Chart 2 looks probable.  SPX closing above the green line makes it possible to fill the gap above. Chart 3 updates the tracking counts.