Wild Swings Coming In Stock Market!
Last time I wrote, the market looked toppy and I was anticipating a 2.5 week low Tuesday (which used to be the dominant 5 week lo). We rallied Wednesday after the expected selling then sold off the rest of the week. I had said that I expected a June 1 top, but after careful study realized that the top would be June 3 instead.
The Mercury Retrograde mid-point low is due 12 calendar days after the initial retrograde point May 18-19, which points to May 30/31 for the low. That means the low will be on June 1 because May 30/31 falls on a weekend. There is also an adjusted Gann 16 TD low due Monday too. I expect initial buying (9/10 pts) on a possible gap up followed by selling down to about SPX 2085/86.
Things look to get wild as we likely rally to slight new highs by June 3 near 2134/35 SPX! This means that after an initial top to bottom drop of about 30 points on Monday, we should see a 50 point rise in less than 2 trading days! Then to make things crazier, we should fall all the way to the 2074/75 area by June 12, interrupted with a huge rally June 8 to June 10. This is the way things have been going with this schizoid market: “I have no place to put my money; stocks are too expensive; buy-sell-buy-sell-buy-sell ad nauseam.”
I have been expecting a May-June correction, but I no longer think that will be the case. After a huge C Wave rally from June 12 to 22 (Jupiter trine Uranus, not Neptune as I stated in the chart below), we should then begin the long awaited 10% correction into around July 16/17, the actual 39/40 week low from the October 15, 2104 bottom (things may get back to normal yet!). Sun Conj. Mars (not Sun sq. Mars) on June 14 portends the correction within about a month (sorry, I get these planets all mixed up!).
Below is an hourly chart of the S&P500 with e-wave/cycle denotation (plus lines of resistance):
Silver still looks to be in a down trend that could last into June 8/12. We made good money on a short last week.
I keep saying (and at the risk of being rude I repeat) this is no longer a buy and hold market, but a traders’ market. The easy money has been made. There is more risk right now to the down side than potential gain to the upside.
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Brad Gudgeon, editor and author of the BluStar Market Timer, is a market veteran of over 30 years. The subscription website is www.blustarmarkettimer.info
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