World markets are throwing a party this morning. The 5 day cycle, which hadn’t been cycling for a couple of weeks, finally has an up phase. The wave has turned up after downtrending since November 13. The 2 day cycle outer edge band has already hit the top edge of the 5 day cycle wave on the chart at approximately 1196, so the 2 day cycle high could be at hand when SPX cash opens around 1187 or so, although the futures certainly could make a run at those outer bands now at 1196 and heading for 1200 by the end of NY trading.
The first sign of a downturn would be a drop below the inner 2 day cycle line now approaching 1185. Other key support lines are the inner 5 day cycle line now at approximately 1178, and the 2 day cycle centerline coming up fast and heading for 1178 then 1180 over the next couple of hours.
2 day cycle indicators on the futures are overbought, but not yet on sell signals.I would expect to see negative divergences before the rally ends. It will be an interesting morning.
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Gold’s rally has been far less spectacular, with a couple of 2 day cycle indicators already edging to the sell side. A break of the 5 day cycle line now coming up at 1714 would signal a probable reversal of the rally.
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