Saturday, December 31, 2016

2017 Outlook (12/31/16)

Happy New Year!

Our 2016 outlook has largely been on target. We projected the following possibility at that time:

Risk On, 2016
a. A potential fourth wave in stocks is likely to bottom in 2016
b. Key commodities are approaching their Fibonacci moments in 2016 for a potential low.

Stocks did find a significant low in February 2016 and SPX rose nearly 26% to its December 2016 high. Gold bottomed in late 2015 and advanced 28.5% to its 2016 high. WTI crude oil has more than doubled since its February 2016 low.

In contrast to 2016, the outlook for 2017 is more ambiguous due to the lack of structural clarity (See below). Thus, it is even more prudent to consider the bull and bear cases in stocks, bonds, USD and gold.

The advance for SP500 since its Feb 2016 low lacks the typical profile of an impulse wave (Chart S1).  This introduces a number of interesting implications on the post March 2009 bull market (Chart S2).

[pink] The potential 5th wave advance is of a lower degree, namely wave (5) of wave [3]. The proposed wave (5)-up is likely to conclude soon, to be followed by wave [4]-down.

[blue or red] Wave [4] pullback is still in progress. 2017 should see a retest of the 2016 lows.

[green] Wave [5]-up tracing out an ending-diagonal-triangle. Wave [5] will reach time-equality with wave [1] in March/April, which marks a Fibonacci 8-year duration of the current bull run.

Despite the surge in long-term interest rates, much uncertainty remains regarding whether the large interest rate cycle has indeed turned up. For example, Chart B1 highlights a couple of paths where long-term rates can stay lower for longer. Chart B2 tracks the nearly 1% rise in 10-year yields based on the possibility of an impulse-wave or a corrective wave.

The USD index is at a key resistance zone - a Fibonacci 0.618 retrace, end of a potential flat (red) or a small-degree five-wave advance (blue) (Chart $1).  While the USD index can continue to advance significantly (green),  a pullback (blue) or a reversal (red) should not surprise.

We suspect that one of the two tracking scenarios will likely to play out in 2017 (Chart G1). Both scenarios suggest that the bear market in gold prices since 2011 may not be over. Chart G2 tracks the roller-coaster ride in Gold prices since it's 2016 low.

2016 Weekly Commentary

* Inside Week(12/23/16)
* Year-End Possibilities(12/16/16)
* Short Term Update(12/9/16)
* Monthly Outlook Update(12/2/16)
* Potential Terminal Move(11/25/16)
* Post Election Thrust(11/18/16)
* Post Election Rally(11/11/16)
* Retest or Reversal(11/4/16)
* Monthly Outlook Update(10/28/16)
* Three Potential Diagonal Triangles(10/21/16)
* A Pencil and a Ruler(10/14/16)
* Indecision and Potential Triangles(10/7/16)
* Monthly Outlook Update(9/30/16)
* Key Juncture(9/23/16)
* Sandwiched(9/16/16)
* Retesting and 2016 Scenarios (9/9/16)
* Monthly Outlook Update (9/2/16)
* Twist or Turn(8/26/16)
* August High(8/19/16)
* Revisiting Breakout and 2016 Scenarios(8/12/16)
* Monthly Outlook Update(7/29/16)
* 2016 Scenarios(7/22/16)
* Breakout(7/15/16)
* Behavioral Markets and Low Expected Returns (7/8/16)
* Monthly Outlook Update (7/1/16)
* Bull/Bear Profiles (6/24/16)
* Brexit/Bremain Triangle?(6/17/16)
* Breakout Attempts (6/10/16)
* Orderly Pullback Scenarios (5/20/16)
* Pullback Scenarios (5/13/16)
* ABC Tracking (5/6/16)
* Monthly Outlook Update (4/29/16)
* ABC Down Looming (4/22/16)
* Awaiting ABC Down(4/15/16)
* ABC Down(4/8/16)
* Monthly Outlook Update (4/1/16)
* 2nd Major Retest (3/24/16)
* Gap Filled, Potential Pullback Next (3/18/16)
* That Gap Beyond Resistance(3/11/16)
* Gap Hunting(3/4/16)
* Monthly Outlook Update(2/26/16)
* Short Term Update(2/19/16)
* Retesting the Low(2/12/16)
* Trendline Reactions and Retests (2/5/16)
* Monthly Outlook Update (1/29/16)
* Rebound(1/22/16)
* Bull/Bear Possibilities(1/15/16)
* Wave E Thrust(1/8/16)
* 2016 Outlook(1/1/16)

Thursday, December 29, 2016

Wednesday, December 28, 2016

Market Timing Update (12/28/16)

[EOD] Stocks- Squiggles and tracking counts. Decisive break of the near term dominate trend line on daily (Chart 3) and Weekly (Chart 4).  A close below the line on the weekly would be interesting. See charts.

Tuesday, December 27, 2016

Friday, December 23, 2016

MTU Weekend Ed. - Inside Week (12/23/16)

SPX delivered an inside week (Chart 1 and Chart 2 with tracking counts). Squiggles in Chart 3 track potential triangles or a flat-like pullback.

Thursday, December 22, 2016

Market Timing Update (12/22/16)

[EOD] Stocks-
SPX drops below the green support with mild rejection at an intraday retest. See chart.

Monday, December 19, 2016

Market Timing Update (12/19/16)

[EOD] Stocks-
SPX is testing potential triangle and dominant trend line support (Chart 1). Tracing the 2016 advance (Chart 2).

Friday, December 16, 2016

MTU Weekend Ed. - Year-End Possibilities (12/16/16)

If stocks track the Decennial Pattern into the end of the year, they may be open to a pullback/consolidation (Chart 1), although January in year 7 looks quite bullish again (+5%).

Chart 2 lists top tracking counts from the 2016 low.
[green]an impulse wave up, most bullish
[gray] a large EDT, bullish
[blue] a small EDT/LDT, to top below 2285/2286
[red] a zigzag. The red B was a deeper retrace of red A on the election night (See Chart 3 on ES). The red C reaches time-equality with red A around mid-January.

Chart 4 lists top tracking counts from the 2009 low. 

Monday, December 12, 2016

Market Timing Update (12/12/16)

[EOD] Stocks - Tracking the post election rally (Chart 1) and how it fits into the bigger picture (Chart 2)
[green] extended w3 impulse.
[blue] extended w1 impulse
[red] double zigzag.