S&P 500 Index (SP500)

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Jeffrey Saut: The call for this week

* February 1, 2016

Rich man, poor man

So far this year, the “rich man” has not needed the stock market. That may have changed last week. Last Thursday, I said, “I think the equity markets are bottoming at session 21 in the typical 17-25 day ‘selling stampede’ sequence.” In Friday’s missive, I wrote, “I think the ‘selling stampede’ pretty much ended at session 21 with yesterday’s (last Thursday) whippy action between plus and minus, which is typically how bottoms are made.” About a week ago, I noted that, if we do bottom in the 17-25 session timeframe, the S&P 500’s (SPX/1940.24) first upside target zone would be 1940-1950. Well here we are, which makes this week critical. If we can get through 1940-1950, the odds that we have made a sustainable bottom increase notably. If we don’t, it would mean another downside retest. I will say that there is a FULL change of “internal energy” available for a pretty decent move from here. Stay tuned . . .

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• George.

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