Summary for week of September 11, 2017

Once again we saw a 6 day high on Tuesday the 5th, however the decline lasted only one day and exceeded our target of 2455. This caused an inversion into a high for the next 6 day cycle of Thursday the 7th. This now suggest that the next cycle of Tuesday the 12th will be a low, followed by a rebound into early Friday the 15th.

The SPX has been making turns at the open, but the NDX has been making turns near 10:00am which is something to watch going forward. Also the 6 day cycle suggests a turn near 1:00pm on the 12th but the 4 day cycle suggests a turn at the open on the 12th.

The Cumulative New Highs are turning back up and made a higher high which is not that bearish yet. However the indicators did turn down significantly increasing the odds of a 10% correction to the 2250 area in September which could precede a rebound into October 13th that takes us back to the highs near 2500 like we saw in 2007.

5 min. may have ended a Wave 5 We may have ended a Wave 5 of 25, 65 and 31 points near 2490, but the NDX made a new high and above 2470-90 we could reach 2506 into the 15th. Both the 6 and 4 day cycles suggest a low near the open for the NDX and Noon for the SPX on the 12th, but we would need to reach 2430 to turn this chart bearish.

10 min. may have ended a Wave 5 With moves of 2.4%, 3.2%, 4.3% and 3.5% the SPX may ended a wave 5 near 2490, but did not decline enough to confirm a lasting high. The SPX has made many turns 3.5 weeks apart, and the dropping Ticks suggest a low near the 12th, but we would need to break below 2435 to turn the trend bearish.

60 min. may have ended a Wave 5 With moves of 9.3%, 7.5% and 7.2% the SPX may have ended a Wave 5 near the 7.5% target of 2496 and the 83 point target of 2488. The Ticks are very overbought suggesting a move down that must reach 2420 to turn this chart bearish. The SPX has been making 6 week turns suggesting a turn near the 19th that should be a low and possibly a deep one.

Daily may have ended a Wave 5 With moves of 193, 167 and 168 from the November low of 2083 and the drop in the Call/Put ratios we may have ended a Wave 5. However, we did not drop enough to confirm a lasting high near 2490. The SPX has been making highs and lows every 9.5 and 19 weeks suggesting the next turn will be near October 13th which may be a 1% marginal new high like in 2007, or a deep low.

News of Interest

This group of stocks has rallied too far, too fast
The chart of the IWM, the ETF that tracks the Russell 2000 index for small-cap stocks, has fulfilled a typical pattern of "five waves" that feature "three trend waves and two corrective waves."

Two charts point to big trouble for tech stocks
At the same time, investors can't hang their hats on more attractive valuations to compensate for the slower growth; while the sector's price-earnings ratio has fallen a bit recently, it is still running hot.

The Volatility Indexes The VIX is turning bearish but needs to break above 12.5 to confirm a market high.

Unemployment and Sentiment The Continuing Unemployment Claims and Sentiment are still bullish since July, but Initial Claims had a large move to 298K which is close to the 300k berish threshold.

Highs/Lows and Put/Calls The Nasdaq Highs/Lows are turning bearish from verbought and the Put/Calls are mixed with the Equity only getting overbought near the 0.64 level.

The Up/Down Volume The Nasdaq Up/Down volume turned bearish and is making new lows and the 10 day Trins are turning bearish from an Nyse overbought low possibly into September 28th.

McClellan Indicators The McClellan indicators are turning bearish as seen in the 15 day StochRSI possibly into the next cycle of September 25th.

Cumulative Highs The cumulative new highs are neutral but are turning up and another bullish week would cancel a possible 10% correction to 2,250.

Gold and Silver

Gold and Silver turned bullish after pulling back into mid-August but are close to the 8 week cycle of September 6th where we could see another pull back before heading higher into the 4 month cycle of early October or the 6 month cycle of January 2018.

The 8 year cycle lows in Gold of 1985, 1993, 2001 and 2008 suggests that the 2016 low of 1045 will probably take Gold higher into the 40 year cycle of 1960, 1980, 2000 and 2020. Assuming the first move up from 253 to 1923 was a 760% Wave 1, the next move up from the 1045 low should take us to the 1045 x 7.6 = 7,942 or even to the 12,000-15,000 area.

US Dollar

The US Dollar turned bearish again past the 16 week cycle low of August 8th. It has now started two waves down of 2.5 points to 91.5 and 90.8? and will likely make a low with a third move from 92.5 to 90. With 3 year lows in 2005, 2008, 2011, 2014 and possibly 2017, a December 2017 low could target a July 2019 high which is also the target of the 17 year cycle high. However, with moves of 12, 20 and 12 points from the 72.7 low, we may have seen the high and only see a rebound back to the 100 level in 2018 before a decline to the 77-80 area by December 2020.

Euro

The Euro turned neutral after exceeding its May 2016 high of 1.16 by 2 and 4%, but should decline to the 116 area probably after the 3 month cycle of late September. It should then continue higher from a mid-November low into the next cycle of early January 2018.

Yen

The Yen turned bullish from the 8 week cycle low of September 6th, and should head to the 95-97 area into the next 8 week and 3.5 month cycle of October 10-17th. However the Yen should make a lower low than 80 into the next 17 year cycle of 2019 and should not exceed the 95-97 and 100 levels in this rebound.

Canadian Dollar

The Canadian Dollar turned bullish from the August 14th cycle low and is likely to head to the 85 area by the next cycle of October 5th. The Canadian Dollar may even reach the 88 area by the next 3 month cycle of November 14th, and even the 94 level by the 8 year cycle high of early January 2018.