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Can The Stock Market Rally Continue: 2017 Outlook

MARCH and CASH S & P 500 FUTURES by Barry Rosen

SHORT-TERM: (12/12) Five waves up from the 2179 Italy vote is complete and a 34-point pullback would have to hold 2130 on March futures. That still would require a new high by Dec. 22nd toward 2296 with additional resistance at 2330. It would seem that 5 waves up from the election low would be complete at 2330 and set up larger fall. That would be about 110 points to 2220 on the S & P and could take a few months, which we need to confirm in the cycles. This suggests that much of the current rally will be over soon.

OVERALL: (12/12) Daily cash charts starting to project 2300 and weekly charts 2335. We have a bias for higher prices from FOMC into Dec. 22 but we're not clear how long it will take to do the last push up to 2330. Could be as late as Jan. 7. Possible it could happen sooner by Dec. 26-27 and that Jan. 7 is a secondary high. The larger issue is that probably a 110-point correction is needed to S & P 2220 into the winter. That might happen from the Feb. high if the market just keeps galloping to the 2420 area. Some cycle highs dominate into the week of Feb. 6 if there are no major hiccups in world politics, with cycle lows dominating into Feb. 27. March is usually seasonally lower and we often see a cycle low into late March, and at this point that might be March 24. Weekly chart highs dominate into mid-June with a secondary high into early August. Market seems in trouble into the 2nd week of October. We need to complete all our data for 2017 and will report in the next issue.

WEEKLY CHART: (12/12) Looking out into 2017, the chances of one more new high are stronger than a crash or a meltdown. In fact one article noted that Central Bankers have enough money to keep the QE game going for another 4 years. The issue now is whether they will pull the plug on free money to get Trump out of power and cause his ruin. That seems to be the case. The proportions of the weekly and monthly charts from the 2009 low suggest that the whole move up won't be complete until 2018 around at least 2409, with the more bearish pattern suggesting a new high to at least 2330 into early January and that is close. We still have to see how world tensions settle out over Christmas but QE remains the only game in town that works. There may be pockets of disturbances in places but it takes a long time for an ocean liner like the NYSE to change course and go in another direction, and it won't happen that easily and quickly.

WEEKLY CHART THOUGHTS: (12/12) Monthly charts are more complete toward 2420 or 2520 on cash as the market is probably doing a 5-wave rally up from the 2009 low, and the 4th-wave bottomed in the 1800 region. The 12-year cycle kicked in August 11, 2016 and extends to Sept. 11, 2017 and its analogue year for 2004-5 was positive for the S & P.

CYCLES SYNTHESIS: Retracing into Dec. 15; higher into Dec. 22; higher into Dec. 26; profit-taking into Jan. 2; higher into Jan 5; profit-taking into Jan. 11; higher into Jan. 17-18.

Much more to come to the upside if this count is correct. Given new highs, you have to give the market the benefit of the doubt. Retracements into the fall should hold 2122 with worst downside to 2000.

ADDITIONAL MONTHLY CHART PATTERNS INSIGHTS: Potential triggers are really heating up more in 2017 with China cycles a mess, and they may again spill over into the world as we saw last January, and that's the most likely straw to break first. Still, money will flee into the US. Terrorist cycles are messy into late Dec. and war cycles are up then, and another false-flag event like 9/11 wouldn't be out of the question for that time window. Somehow the Discreet Charm of the Oligarchy have a way of getting through just about every crisis and we continue to be amazed at how well they bounce back and keep their investments in good shape.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.