SPY Cycle Patterns for Nov 28 Thru Dec 2 - A Sideways Melt-up

This week, I expect a bit of a sideways melt-up before the Dec 7 start of the Santa Rally.

The markets are digesting the post Thanksgiving trends and may continue to stay in a fairly narrow range over the next 7~10+ days.

I do believe a critical Fibonacci inflation point is likely before Dec 7~10 - prompting a moderately strong Santa Rally phase to start.

Reading some of the comments on Twitter, analysts and various traders seem to be all over the place. Some are calling for a massive price collapse to take place. Others are suggesting a new rally phase will take place.

What I can tell you is that, which you should be watching my Youtube videos to follow my Custom Indexes, global traders are shifting capital away from global risks and into US Dollar based assets. This trend will likely continue for many months still.

The unwinding of global speculative excesses (particularly in nations which saw big increases in home values - think China/Asia, Canada, others) and/or those caught in the pre-Covid excess credit/debt trap (the cheap USD carry trade) will likely continue to struggle as the "revaluation event" puts even more pressure on these foreign markets.

Canada is an interesting example. A fairly strong economy that saw a big increase in wealth, asset valuations, and investments before, through, and even after COVID. The excesses were fueled by a global speculative phase (rising prices), almost like a "tulip bubble" where everyone through "I can't miss this incredible opportunity"... So they jumped in AT ANY COST.

Just like what we saw with Bitcoin, the downside to that rally may be a -50% to -70% decline of certain assets over time.

One must try to understand that when an environment of weaker asset growth (homes and other tangible assets) settles in throughout the world, capital will seek three things:

Safety
Security
ROI

You can't find these three things in extended underperforming assets (think China/Asia, Canada, others). That capital MUST move towards any economy that will contract the least, has the strongest base valuation correlation, and has the potential for moderate earnings, revenues, and RECOVERY.

In my opinion, that is the US, UK, and possibly Japanese markets.