It appears the uncertainty of the elections is in full swing. So we can classify this correction as the elections correction at this point. So with this weeks closing, which is weekly, not monthly. We have all three of the big indexes in correction mode into the elections.
We still need to be aware of the flight to quality. Right now, bonds are in trouble, so the markets are really acting on uncertainty. We see NY Gold hit a weekly bullish (which was 1235), so expect the uncertain people to buy some gold this week. But this does not change the long term trend. We also have the EURO close below a weekly bearish, thus hinting to us the currency will go lower.
So money is not sure where to flee to. But the long term is equities.
Here are the facts the numbers and what we are looking at:
- Companies are NOT ALLOWED to buy back shares during earnings
- Watch Novembers open (after earnings period for US equities)
- November Elections, looks to be a bear trap (do not fall for it)
- Majority must be wrong is only way markets keep going higher
What Numbers We Were Watching Today For The Close:
- DOW JONES: 24965.00 weekly bearish, elected 10/26 (Closed: 24688.31)
- S&P500: 2676.70 weekly bearish, elected 10/26 (Closed: 2658.69)
- NASDAQ: 7084.82 weekly bearish, failed 10/26 (Closed: 7,167.21)
So expect the DOW and S&P to move downward into next week and into 11/05 for the elections. NasDaq did not elect weekly bearish, which prevents a major weekly crash of all markets, yet it is still weak. We have earnings next week for Apple and Facebook. But the mood is heavy in the market, so don’t expect to much bulls to get in.
Here is data to look at for monthly end of October:
DOW JONES: 23,997.20 monthly bearish, (Would signal bear market into 2020 if elected, then a cycle inversion flip back up into 2032 — nothing is implying this patter thus far)
Notice the monthly uptrend line, we are still testing this line with todays drop and next week. So we just keep watching 23,967 (support) area at end of October to see what happens. But we need to expect market correction into 11/05 elections week.
This may be the bear trap that sends the market into the trade of the century. This may be necessary as we head into elections, which will unleash violence/civil unrest in the aftermath.
What Cycles Are Occurring:
Looking below at the Economic Confidence Model, we have important point in time on Nov 21, 2018 (Pi Cyle). This looks to be a political event (somewhere in the world) which should be paid attention to. You can see it below, this is all part of this trend we are in. (This is not the market Value, it is the confidence model which will push the publics mindset from Public (Bonds) to move into Private (Equities).
It’s possible it will continue to drop the confidence of the people as we head into 2020 all while people will start to entertain the idea that the markets are the only place in town and bonds are failing. This Nov 21st, is the date to watch. Will keep you posted.
4 Independent Cycles are all converging. This convergence is likely to test the people and have them expect the market to melt down. Do not fall for the bear trap just yet. We watch the numbers.
(Top Left) Monetary Crisis is at the bottom ready to take off: This is the currency issue that will break apart the EURO.
(Top Right) Revolution is at the bottom ready to take off: This is the civil unrest we as humans continually do through history. Our emotions never change, when Gov takes away earnings (due to taxes, pensions, etc)… people get upset and revolt and blame each other. Instead of holding gov accountable due to the media propaganda.
(Bottom Left) Economic Confidence, Sovereign Debt Crisis: This is the overall debt problems emerging markets will have first. You will see it in Turkey, then Europe, Asia, and finally like a contagion to the US.
(Bottom Right) Economic Confidence Model: This is the capital transition from public(bonds) to private(equities). We have already crossed the rubicon!
With all these factors around the world, this should give you confidence to wait, do not just this market yet. We may have a bear trap forming. Let’s watch the numbers and remember capital has no where else to go to except into Equities.