Market Observations for the Week: The NDX and SPX both closed at new record highs as financials and semiconductors lead the way higher. Crude oil tested $58 and then reversed down impulsively on more supply concerns from Saudi Arabia and Kuwait. Gold tested $1431 again and pulled back in a tight range day – gold appears to be triangulating on the hourly chart.
7/24/19 (Commentary for Wednesday) The 5th wave up on the NDX and SPX took us to new all-time highs on the backs of the semi-conductors and financials. The SPX ended a wave 4 correction late Friday and started a wave 5 rally that could take us to higher highs into next week. The market indices are advancing despite weak breadth numbers which confirms our bias for new highs above SPX 3017 into next week. After a mid-July correction into 7/19, we still have our target of SPX 3100 by August/September – we DO expect the large sideways SPX consolidation pattern from January 2018 to be DECISIVELY taken out this summer before we roll over for a fall correction. Global markets are all about liquidity here and we have long predicted that the Fed will shift back to an easing stance(set to start on 7/31) - a crisis in the European banking system would evoke a quick easing or QE response from the US Fed. Crude oil tested $58 before falling impulsively after news that Saudi Arabia and Kuwait threaten to pump more oil in the near term. Gold bounced again to test $1431 before pulling back – we need to close above $1429 to get gold going higher. The USD continues to test 97.75 – a move above 98 looks in the cards.
- Big Picture on Stocks (UPDATED) - The SPX ended a mild wave 4 on the daily chart late Friday. We are getting close to an important summer high by the 7/31 New Moon and Fed rate-cut day.
- Big Picture on PMs (UPDATED) – Gold undercut $1415 and may have finished an EW a-b-c correction – a daily close higher above $1429 would confirm this.
- Stocks – The SPX ended its correction late Friday and rallied to finish 5-waves up on the rally today – we took profit on out TQQQ calls.
- Gold – Gold needs to close above $1429 to pave the way for a move higher.
- Silver – We saw "big prints in SLV in the Dark Pool" last week – this means that silver is moving from "weak hands" to "strong hands" here and should accelerate its move up. We favor the silver catch up trade over gold here.
- Crude Oil - Crude oil rallied to test $58 and then reversed down impulsively – the trend may still be trending down.
- Bonds - Bonds appear ready to test 155'10.
- Dollar Index – The USD looks poised to exceed 98 on Thursday.
TURNING POINT DAY
The turn window for this week is 7/22-7/23.
Comments