Every week I do a Closing Prints segment and this particular week it happens to be the end of the month so I am doing a monthly Closing Prints segment. Let’s jump in.
As many of you know that have followed me you know that i was bullish before the election and I have been bearish since early December. Absolutely nothing has changed except for the fact that my position is Green now instead of red. The S&P monthly chart has tapped the top end of the risk range and I expect this election rally to completely unwind to start the year. My target lower is towards 2100.
As I said last week, this is reversing and is reversing now. As you can see with this last down week it has already started. This is well outside of the range and I expect this to at least check back to under 19,000 before even thinking about higher. The media got retail to pile in at the top again. don’t worry they will try to get you to sell the lows as well.
Same deal, blowoff euphoric rally that the media and everyone screaming Dow 20,000 got you believing and hoping Trump was the savior. I wonder if he will tweet it was his fault that it drops 10% too?
Ironically this look really good on the monthly close. I was not sure if this is going to continue higher because USDCAD has me worried. However as long as this stays above 52 I believe it is going to 63.
After being bullish at the start of 2016 and flipping bearish in July, it’s time to be bullish again. Everyone thinks bonds are going to zero, guess what, they are not. Buy bonds here.
This is the most important chart on here in my opinion. the close above 1.051 is very promising and if this continue higher off the weekly reversal will be considered a failed breakdown. This is a very powerful reversal play considering globally everyone is short, institutions and retail now. It doesn’t get much better than that folks. If the dollar tops and the Euro reverses O MY!
Last but not least. The devaluation of the yen. This is coming down, now. The SPX rally after the first couple weeks was completely due to the devaluation of the yen and the “Yen Carry Trade” This is now over and will not be able to be propped up anymore now that the year end markup is done. Look. Out. Below.