Below are the views we shared in our most recent issue of Key Market Strategies about the major markets.

Comments: Near-term looking for stocks to stage a correction lower, commodities to follow; bonds to edge higher; and the dollar to work higher again in the wedge pattern.

Stocks--SPY Daily [last 204.67]: Key juncture. Stocks rallied to bang on the 78.6% resistance level at 205.23 we have been watching and have back off slightly.This would be a natural place for a correction lower in Wave 4 targeting down to 200; with the next target being the swing low at 197.38.If stocks turn down here, we would be watching for a three wave decline because that would strongly suggest the rally phase is not over and we have only seen Wave 3 of 5.In the chart below we have drawn a stylized three-wave corrective decline, i.e. Wave 4.Intermediate-term players may want to sit through a corrective move lower; however the risk to that strategy is the possibility the impulse move from the low is complete, i.e. alternatively we have seen Wave 5 high as labeled in red. But our primary view is the next move is likely corrective.For some more perspective, drilling down to the 4-hour chart, see page 2.

Stocks--SPY 4-hour View:  Note the divergence in momentum relative to the price high (Stochastic indicator at the bottom pane of the chart).This adds some credence to the view at least a near-term top is in place. 

Emerging Markets--EEM Daily [last 34.10]:  We have seen a standard 38.2% retracement in EEM, reaching our initial target of 33.90; ultimately we expect to see at least 35.86—minor Wave 5 where it hits swing high resistance at 50% retracement before the rally is complete.Given the tight ongoing 21-day correlation between EEM and SPY at a whopping 96.5%, we would expect a correction here in line with analysis as described in SPY above.We suspect any Wave 4 correction lower should hold the above the down-trend line (in red); if not we will have to reassess this outlook.

Long Bonds--TLT Daily [last 128.07]: We haven’t got much more clarity here.I am neutral-plus (if that makes sense), i.e. expecting a rally near-term in Wave B as labeled to 132-134 level—longer term it appears an intermediate-term high is in at 135.24 and a new three-wave corrective downtrend may be underway—still primary view by a small margin and I have shown that stylized path in the chart below as an A-B-C correction in blue.But the alternative view is the move from the 135.24 high through the recent swing low made on 3/11/16 at 127.21 is major Wave 4 (labeled Alt 4); setting the stage for a new rally high. 

Gold--GLD Daily [last 118.96]: Now expecting a correction lower in minor Wave (b) to be deeper than initially thought last week—targeting down to 116.13 (a=c). Note the divergence in momentum (RSI) as GLD made a rally high. We expect a three-wave rally (a)-(b)-(c), with cope in Wave (c) to carry to first resistance comes at the swing high 125.34; with extension targets all the way to 139.82.  

Crude Oil--USO Daily [last 10.59]: We are viewing the rally from the low (7.67 on 2/10/16) as the first wave, labeled (a), of a three wave rally to carry to around 13.My primary view is we are due for a correction here (which would coincide nicely with a decline in stocks as there is a 21-day correlation between SPY and USO of 92.6%).USO is testing key 38.2% retracement resistance at 10.92, i.e. minor Wave 5 of A. I am expecting a pull-back to 9.5-level in Wave (b); then a resumption of the rally. I still suggest intermediate-term players consider staying long with a 13 target holding through corrections.  That being said, critical support comes in at 9.07…a break of that level changes the view here and sets up another drive for new lows.

US Dollar--UUP Daily [last 24.70]:There is evidence to suggest a move back to 23.72 (on a break of the 24.72 near-term swing support).   However, given the price action the individual pairs and the relative correlations with other asset classes, there is still reason to believe we see yet another move higher in a maddening wedge pattern, if so then UUP looks to work higher again.I am not buying into the idea that some implicit deal to lower the value of the dollar was secretly negotiated at the last G-20 meeting as is now be rumored in the financial press. The G-20 crowd seems a hapless bunch who likely has trouble on agreeing wine and cheese selections to put on the menu.  After this maddening wedge (labeled as Wave 4) is completed, I am expect the UUP to make a new rally high.