Another week, a little less intrigue for the market. Thankfully there were no more intraday black swans. It started with the markets celebrating the tax win which has passed over the weekend you’ll recall. This is only a week ago but seems like such a long time. This week there is an important election coming up in Alabama for Jeff Sessions old seat. You may have heard about it. It’s important on multiple levels but for our market work, a Roy Moore win will be seen as validation of the Trump growth agenda movement. That is likely the key event of the week. It’s a bigger event than the Fed meeting which is also this week.
There isn’t much drama for the Fed, they are expected to raise rates, yawn. But the fireworks are in this election because if Moore loses, it narrows the GOP slim edge. If Moore wins there is also the possibility they refuse to seat him. Don’t kid yourself, last week the Democrats decided Franken had to go, it wasn’t because they cared about what he did to Leeann Tweeden. The Minnesota seat is safe, all the Governor has to do is nominate someone else. Its possible they turn up the heat to not allow Moore in. Hard to say what the market is going to think about it.
We have an uneven technical picture with the NDX looking more sideways and the Dow already retesting the high. Tech is taking it on the chin as a result of a lagging SOX but the BTK is making a comeback. Transports never dropped too much but already back near the high. Housing is hanging on while the banks are as well. Oil stocks are also hanging on. Europe also looks okay. This is not the time of year to look for the market to drop. It can drop but as you’ve seen it recovers quickly.
Perhaps the only area really taking on the chin lately has been precious metals. This group has several key technical violations over the past two weeks. But this might be the last chance. Here we have the last leg of the move down of 183 points is 67% of the entire range and the low at 1566 gives it a chance to straighten out right now. There are no coincidences in the markets. The XAU also has an interesting vibration at its low and has been working on the reaction since Thursday. With at least a golden spiral 1.64 third leg up in the U.S. dollar, it also has the chance to roll over or consolidates the first part of the week.