Market update Tuesday 1/17/2017
This morning the market is no easier to predict, than it was on Friday, as we continue to trade into a tiny, yet complicated, consolidation pattern - seen on the 5 min chart below. Still, we have some support levels to watch, and as always let the $VIX be your guide to the risk on/off trade. Low $VIX = no fear. I think we're going to some short term volatility, but $VIX resistance looks like 16.
Looking at the $SPX chart, and Monday morning quarterbacking, you can see where the S&P was manipulated higher (above the top of the top purple line at the top of what looks like a down-turned megaphone pattern), that was Friday morning, and the resulted in a little short squeeze. This is the whole reason high frequency traders placed their opening bid there in the first place. Nevertheless Fridays move looks like the first leg up (an impulse wave). I have an arrow pointing to 2242 - if we see another leg down wed, but maybe the 2263 level holds. This chart remains a work in progress.
Another possibility is that the market whipsaws into a wave "b" triangle as seen below, but I'd bet we're going to see higher recent market highs, headed into OPEX (inauguration day) Friday.
So, support looks like 2263 - 2265, and from there we either get another head fake rally, or a sharper pullback, or even one more shake-out, ahead of a bullish OPEX, and Dow 20k+ - at the top of the range. And let me add, anyone who is watching this sideways range or pattern, and asking me about time lines, for a 10% correction is wasting their time. I'm long term bearish, but we're stuck in this range for the foreseeable future. 
The NASDAQ and the $SOX on the other hand is a sell, but I wouldn't expect much until after the inauguration.
Gold continues to hold up, and this morning is being bought at the 50 day moving average, but it's coming up against a short term bearish Fibonacci target of 2020 and the top of a bearish channel. Looks like it's going to be held up into OPEX, so the miner bulls get paid on their calls... typical manipulation.
Gold miners have traded into what looks like a wave 2 suckers rally. Maybe we see a false breakout above the channel going into OPEX. For now it's just holding up.
Someone recently asked me if gold, and miners, can sell off with the market, and although we haven't seen this happen for a while, it used to be the norm. Anything is possible.
Take Care, AA
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