The S&P 500 ($INX) extended its new major (long-term) 5-wave uptrend to a high of 4,080.11 during November. At some point, Wave 1 will peak setting the stage for a Wave 2 selloff that could last for 3 months and retrace roughly 80% of Wave 1. Theoretical Positions: Long from the October close of 3,871.98 with a stop below the October low of 3,491.58. We will keep an eye on the weekly chart for a move to a secondary (intermediate-term) downtrend, what would be considered Wave 2 of the major 5-wave pattern.
The Dow Jones Industrial Average ($DOWI) extended its major 5-wave uptrend to a high of 34,589.77 before closing the month at that mark. The uptrend began with a bullish key reversal during October. Theoretical Positions: Long from at least the October settlement of 32,732.95 if not the breakout of the September high at 32,504.04.
The Nasdaq ($NASX) extended its major uptrend to a high of 11,491.94 during November. This trend began with the bullish spike reversal completed during October. As with the S&P 500, it would not be surprising for the Nasdaq to see a Wave 1 peak leading to a Wave 2 selloff. Theoretical Positions: Long from the October close of 10,988.15 with a stop below the October low of 10,092.94.
The US 10-year T-note (ZN) posted an inside range during November, with a bullish crossover by monthly stochastics below the oversold level of 20% signaling the major trend is set to turn up. As of this writing, nearby futures have not completed a recognizable reversal pattern, though some could apply the Horseshoe Proximity to October and November activity and come up with a bullish 2-month reversal. Theoretical Positions: It’s possible longs might’ve been established at the November close of 113-070 based on monthly stochastics and a possible 2-month reversal. If so, stops would be placed below the October low of 108.265.
