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Tuesday, January 2, 2018

Market Wrap Up 2017 - Outlook for 2018

2017 was no doubt a great year for investors, and very predictable for traders. Stocks rallied into the end of the year as expected, and I expect this rally to continue into early 2018, as money managers return from holiday, and are forced to chase performance. 

And what a great way to end the year, on a little panic wave "e", to complete wave 4 consolidation, as seen on the chart below. 

Market seen selling off into Friday's close; as predicted, earlier in the week. I didn't even have to update the chart this morning.

Here's what it looked like on the SPX - on a 1 min chart:

Next comes wave 5, and that should wrap up by the end of the month, I think. From there, I'd expect to see some profit taking, ahead of earnings season, followed by another rally on "better than expected earnings", and a dovish (new) Fed (chair)... The soonest I see a major correction is March, but now we're getting ahead of ourselves.

I'm not too keen on chasing the broader market rally into Wave 5, ahead of a reversal, and I'm already looking to commodities for some better trades in 2018, in Energy, Oil, NatGas, Gold, and even Silver.  Of course trading commodities, carries with it, greater risk, and you should decide - ahead of time - if you can tolerate that or not. 10% moves are not uncommon, and if you're leveraged, you can get into serious trouble, in a hurry...  One way to lower your risk would be trading in and out of the $SLV (silver fund), or $GLD, buying and selling the $UNG (NatGas fund), or $USO, rather than trading leveraged funds, or contracts.

Of course if you like leverage as much as I do, you'll probably be trading $NUGT, and $DUST, and such.
I don't like miners here, based on the candle-stick analysis alone, so try jumping into $DUST first thing this morning - after the open.

$GLD is also coming up against resistance (@ $124.76 - 126.25), but typically the miners lead the way. 

Don't like Oil up here:
 $Brent - trading at the top of the channel.

 Looks like we're seen on the bottom on NATGAS, after a years worth of consolidation, but it's hard to get on board right here.

 You see lots of bearish money managers coming on the financial new networks, talking about a "correction in 2018". That's bullish a contrarian indicator. Make them chase this market!

Happy New Year!


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