Summary for week of September 18, 2017

The 6 day cycle of the 12th returned into its normal high from the low on the 11th, but there was no meaningful decline into the normal 6 day low of the 15th. This suggests a 6 day cycle high for the New Moon and Fed release of the 20th followed by a 6 day low on Monday the 25th.

However, the 8-9 day and 28 day cycle suggests a high near the 18-19th which should keep the moves up small into the Fed meeting of the 20th. We could see the range bound market of the last 4 days continue until the Fed release and cycle high of the 20th.

The Cumulative New Highs are turning back up and made a higher high which is bullish. However the Aroon Oscillator did turn down significantly increasing the odds of a 10% correction to the 2,250 area soon, which could precede a rebound into October 16th or 26th that takes us back to the highs near 2500 like we saw in 2007.

5 min. may be near a Wave 5 high The 6 day cycle of the 12th was a high and the 15th was probably a low which could take us higher into the next 4 and 6 day cycle of the 20th for the Fed before a likely drop into the cycle of the 25-26th. With targets in the SPX near 2500, 2506, 2513 and 2519 and NDX near 6009 to 6019 we are not likely to see a big move up this week.

10 min. may be near a Wave 5 high With moves of 2.4%, 3.2%, 4.3%, 3.5% and 3.4% the SPX may be close to ending a Wave 5 from 2417 to 2503 (3.5%). The SPX has made many turns near an 8 day cycle that occasionally strectches to 9 days and gives meaningful turns 85% of the time. This suggests a high as early as the 18th with the next turn near the 27-28th likely a low.

60 min. may be near a Wave 5 high With moves of 9.3%, 7.5% and 7.7% the SPX may be near a Wave 5 high for the 28 day cycle of the 18th, but it could also extend to the top channel near 2015 (8.3%) or unlikely to 9.3% near 2538. The next 28 day cycle will fall near October 26th and will probably be a low.

Daily may be near a Wave 5 high With moves of 193, 167 and 168/178 from the November low of 2083 the SPX may be within 15 points of ending a Wave 5. The Equity only Call/Put ratio is near levels where previous highs were seen. The next 9.5 week cycle will fall near October 16th and will probably be a 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 turned bullish and could take us higher into Tuesday the 19th.

Unemployment and Sentiment The Continuing Claims are still bullish since July, but Michigan Sentiment and Initial Claims are turning bearish.

Highs/Lows and Put/Calls The Nasdaq Highs/Lows turned bullish but are overbought and the Put/Calls are mixed with the Equity only very overbought near 0.61.

The Up/Down Volume The Nasdaq Up/Down volume are bearish but its top component is overbought and the 10 day Nyse Trin is turning up from overbought with the next turn due on September 28th.

McClellan Indicators The McClellan indicators turned bullish but the 15 day StochRSI is overbought enough to limit gains with the next turn due on September 25th.

Cumulative Highs The cumulative new highs are bullish after making new highs but the top Aroon Oscillator turned down and could start a 10% correction to 2,250 soon.

Gold and Silver

Gold and Silver turned neutral from the 8 week cycle of September 5th and may continue lower into early October. Gold should then resume its move upwards into the next 8 week cycle high of late October and 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 4 week cycle of September 18th and/or 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 bearish from the 4 week cycle of September 7th, but should hold above the 89-90 area before heading higher into the next 8 week and 3.5 month cycle of October 10-17th. However the Ye1n 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 is turning neutral from the 4 week cycle of September 11th, but is likely to hold above the 80 area and head to the 84-85 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.