The Week Ahead 2018-12-17

The defining item this week will be the FOMC statement and press conference on Wednesday as traders look for clues of a halt to the rate hikes in 2019.

Bradley Siderograph – Late 2018 into 2019

The Bradley Siderograph is timing model for stock market turns that while no means perfect is worth keeping an eye on. Main interest is in the inflection points on the graph, not the direction or magnitude of change. An example of this is that the May 23rd 2018 swing in the Bradley was the biggest swing in the graph but was weak but the next tiny inflection at the end of June resulted in a major low in equity prices and big rally. Below you will see a chart with the Dow and Bradley model with dates of the next inflections out into fall of next year. Of note is then next two, December 20th and January 16th, of which I think December 20th is more important since it is a day after the next FOMC meeting.

The Day Ahead: PM Edition 2018-12-13

Bonds reached the first support level of 142^15 today. What next? If wave (a) is to only be an a-b-c formation, it could be done and thus any bounce set a lower high before rolling lower in the first steps of ‘a of (b)’. The other option is that (a) turns into a five wave sequence, which implies a modest new high to the December 10th high before a more serious retrace.