The_Patterns_Guy

SPY expect an early weak pop and end of week drop

AMEX:SPY   SPDR S&P 500
While I know many think the #SPY, #SPX, or S&P 500             is due to end it's bull run. I will avoid any grand predictions for now.

Expect the week to start off well, however, I am not sure the end of the week will end well. At best expect a marginal gain for the week. At worst expect a sharp decline by early next week. Why?

1. the market is forming a raising parabolic ascent in all chart time frames (15 min, 1 HR             , 4HR, 1D, 1W, 1M). No matter what timeframe you review, all trends are bullish .... and unsustainable.







2. There are four open consecutive gaps from last week.


3. we are going into mid-month. (those that follow the stock market almanac may disagree)

4. This week and next are historically not good weeks for years ending in 8 and annually in general. (same as above, feel free to disagree)

5. There will be a lot of churn coming out of the news.
-by the end of the week we should know the status of the government fund bill.
https://www.bloomberg.com/news/articles/2018-01-02/trump-and-congress-spoil-for-fights-with-shutdown-again-at-stake

-expect south Korean and north Korean talks to commence. The north has a flair for the dramatic that could upset markets, but is likely a negotiation tactic.
http://www.cnn.com/2018/01/04/asia/north-korea-south-korea-talks-intl/index.html

-many companies set to release earning, will begin shaping the media narrative ahead of earnings in mid-month. Expect a good chunk of companies to rejigger their finances to take advantage of the tax bill. Some companies (like Goldman) will have to take a hit last year to take advantage of an earnings win-fall this year. So while guidance will be good, earnings might not be as expected. They would be fools to wait until their earnings release to begin lowering expectations.
https://www.nytimes.com/2018/01/04/business/corporate-tax-cuts.html


All that being said, I would not fight the trend. The trend is up! Once all is said and done, we will probably see a nice end of month surge and up we go.... until we do not and this whole thing comes crashing down.
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