Hello Everyone,

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Weekend Newsleter standard Webpage Format  - contains all the chart links

I hope everyone has had a nice weekend and enjoy the Superbowl if that's your plan for this evening! Coming into last week the market was quite overbought, and easy guild for this is how wide the moving average ribbons had gotten on the daily charts, and when you see that some reversion to mean is expected. For the week, the Dow Jones lost -0.2%, the SPX lost  -1.1%, the Nasdaq lost -2.4%, and IWM small caps lost -3.4%. 

Last week the SPX stalled at a resistance level and has logically pulled back. In the short-term I'm observing what appears to be obvious abc 3-wave like pullback patterns in the SPX and QQQ. I am overall favoring a higher low given the strength of the move up.
Symmetry Observations: The pullback off the highs for the SPX is roughly the same as the largest pullback in mid January i.e. 134 vs 130 points. However, a negative is that the pullback from the highs on the QQQ has exceeded it's January pullback i.e. 16 points vs 11, this sets up a lower high possibility on the next rally. Should the market ultimately form a higher low and make one more new high, my target area is around the 4300 - 4350 area.

The Dow Jones has a very obvious symmetrical triangle formation. The Dow Jones lead the indexes last year and I think we will see this area start to outperform again sometime this year - for now monitor this very obvious coil formation. 

From mid February tends to be one of the weaker months from a seasonality standpoint. 

There's a lot of complacency, and a lot of people calling this a new bull market now, even quite a few of our subscribers, and who knows maybe they are right. However, I still think we could be in a longer bear market that lasts for a 2 - 3 years, kind of like the 2000 - late 2002 bear market, and we are in one of those periods where the market is uptrending at the moment. In bear markets you can have periods of 3 - 5 months of uptrends. 

News: CPI on Tuesday is VERY important and the markets reaction to it

The energy area stands out, particularly the OIH. Remember these areas have strong fundamentals. 

The US Dollar has rallied out of it's wedge and that has placed logical weakness on the precious metals area. Overall I could see the precious metals and GDX needing to complete an ABC 3-wave like consolidation over a period of time before they are ready to head to new highs again. Watch for possible support on gold near the 50 day MA.

keeping these larger macro comments in place
- We know that a future recession is coming, the question remains how deep will it be
- It's all about future earnings and long-term will direct where the market goes
- Mike Wilson, the famed Morgan Stanley analyst warns that we are going to see an earnings degradation and for the market to eventually head lower again (remember he called the bottom in October)
- Unfortunately Russia remains a wild card - if they were to attack a western nation or use a nuke - clearly that would have profound market consequences.

Matt