Hot Markets
Outlook from Fortucast Market Timing
NEAR TERM: (1/30). The S & P is likely to have a high on Feb. 11 but needs a low into Feb. 5-6. We are not clear how much it may fall. Everyone is looking for a correction to 1250 to buy and maybe it can still happen into Feb. 5-6 but then a new high could come into Feb. 19. 1340 and 1358-60 have a chance to complete by Feb. 19 and followed by a 2-week pullback.
OVERALL: When we look at cycles in February, there are small pockets of weakness like Feb. 2-6 but many of the individual cycles point higher into the 3-day weekend of President’s Day. We favor lower prices into March 5 and then a final high into March 14-15. The 6-week cycle high is due at publication but it will probably take a major failure by the European summit and much more to get this market lower. Maybe that means 1358.50-1360 may come in before a correction and probably 1250 is asking too much. Still open to a correction into Feb. 5-6.
SHORT-TERM PATTERNS: (1/27) Daily chart computer models are throwing out 1358- 1360.50 on the upside and 1250 on the downside. We cannot pick a high until we may get more than a 25-point correction. We are still open to 1336-1338 as late as Feb. 2 and maybe 1360 by Feb. 19 but the market may not pull back until after President’s Day weekend makes everyone a patsy. No reason to sell tis market until a 25-point or more break happens.
NOTE: Fortucast was ranked #7 in a survey of over 100 analysts for long-term S & P timing over the last 3- and 5-year periods in Jan. 31, 2011 issue of Timer Digest.
WEEKLY CHART OVERVIEW: (1/25) For now, fundamentals are going to support this market probably into February with a first target of 132.30 and then an eventual target of 135.27—possibly into April. May have to rethink this if stocks keep going up but they are due for a 2-3 week correction very soon. Pullbacks are likely to hold 129.20. FED is still thinking about QE3 but what that did on Jan. 25 was QE2.5 as the flash to the market for lower rates into late 2014 was enough to celebrate early. Of course it is dependent on conditions not changing.
LONGER-TERM: (1/25) There are patterns that would allow for 8325 to come in February and maybe a slight new high to 8350-8400 even later. First quarter weakness clings to the Euro into April and the dollar will benefit if the euro goes to 118.65 or lower. If the dollar does not rally enough, maybe there could be a C wave lower from the start of this current fall that will go into March 15 when US stocks top. The shape of the current pullback is suggesting that something bigger is happening.
LONGER-TERM: (1/25) This market is suggesting a fall to 118.77 and then another bounce and eventually 110 into late in 2012. Yes, this market will collapse but will players survive all the manipulation beforehand. If everything else holds up into March 15, can the Euro also?
NEAR TERM: (1/30) Given that stocks probably will go higher into Feb. 19, we may have to be patient about any sales as they may be relatively minor. 1817 may come in by the middle of the month.
WEEKLY CHART OVERVIEW: (1/25) Gold is starting to project 1817 and that may come in by March. We still may get a decent sell-off for 2-3 weeks in the middle of February but it will probably be a buy unless something messy happens first.
OVERALL: Crude could have fallen more but did not go through 9700. Very small chance for 9521 now, which means that the market is likely to do a D wave higher to 105.00. Could happen quickly but cycles are not clear enough and we will need to do more work this week to figure it out. Not likely a good trade. The E-wave pullback would project 100.00. This whole move might take until early March with a cycle high probably into Feb. 19 or so. My guess is the next sale is in the 101.90-102.00 region if congestion continues and the market delays getting to 105.00, which could happen by the middle of the month.
WEEKLY CHART PERSPECTIVE: While 109.00-110 could come in, if gold and stocks top out very soon, it may take until March 15 or later to reach that level.
FUTURES AND OPTIONS TRADING IS RISKY AND CAN RESULT IN SUBSTANTIAL LOSS. THE USE OF STOPS MAY NOT LIMIT LOSSES TO INTENDED AMOUNTS. SPREAD POSITIONS MAY NOT BE LESS RISKY THAN OUTRIGHT POSITIONS. PAST RESULTS DO NOT NECESSARILY INDICATE FUTURE RESULTS. SOURCES ARE BELIEVED TO BE RELIABLE, BUT NO ASSURANCE IS MADE FOR ACCURACY.
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