Folks,
Market Observations for the Week: Despite a weaker than expected Chicago PMI number, the SPX built on yesterday's rally and gave us 5-waves up on the hourly chart from late Friday into Tuesday's close. The SPX also took out Thursday's high at 3088 and that confirmed the correction low at 3004.83 late Friday. However, after 5-waves up we could see a pullback into the Fed minutes announcement at 2:00 PM EDT. Crude oil took out Monday's high before correcting – we are looking for a big run higher into the Full Moon weekend that could surpass $41.68. Gold popped higher to another 7-yr high at $1804 before the Powell/Mnunchin testimony – a pullback into Wednesday's FOMC minutes is expected. The USD made a higher high at 97.80 before reversing down after the open.
6/30/20 (Commentary for Tuesday) The SPX rallied despite the weaker than expected Chicago PMI and the rally was broad-based – all market sectors were higher for the day. The SPX took out 3088 as it spiked into the close and that confirmed that a correction low was made at 3004.83 late Friday. Still, the SPX finished 5-waves up on the hourly chart into Tuesday's close and we are expecting a pullback into the Fed minutes release at 2:00 PM EDT Wednesday. Crude oil took out Monday's high near $40 and then corrected but we are still looking for a run into the Full Moon weekend. Gold broke out to $1804 before the testimony of Mnuchin/Powell on Tuesday and is correcting sideways into early Wednesday. The USD made a high for the day at 97.8 at the open before declining into the close – this gave a boost to the PM sector.
Big Picture on Stocks (UPDATED) – The SPX price action from the high of January 2018 to the low of March 2020 was a large Running B-Wave correction in Elliott Wave parlance. June 15 was the end of Wave A down of an EW a-b-c correction in the NDX– we may have seen a B-Wave top on 6/23 and a C-Wave down that finished on 6/26. We are looking for a run higher to SPX 3500+ by September.
Big Picture on PMs (UPDATED) – Gold broke out above $1800 and tested $1804 before tracking sideways into Wednesday. We may see a pullback into the Fed minutes Wednesday afternoon. The GDX made a breakout above 35. Seasonality goes strongly positive for gold in early July.
- Stocks – The SPX shook off a weaker than expected Chicago PMI number and finished an EW 5-wave rally into Tuesday's close. The Powell/Mnuchin testimony Tuesday at noon did not throw any curves at the market – we moved above SPX 3088 late in the session and that confirmed the correction from 6/9 is over. We are holding NEM and GOLD calls after the GDX breakout today.
- Gold – Gold made a breakout to $1804 today and the GDX made a breakout above 35 – we are expecting a corrective pullback into the Fed minutes release Wednesday afternoon.
- Silver – Silver outperformed gold today but is still below the recent peak at $18.95 – this is a bearish non-confirmation so far of gold's breakout today. We will see if silver can take out $18.95 by the weekend's Full Moon.
- Bonds – Bonds finished a 5-wave rally from its breakout and started pulling back – we could test the S1 support pivot at 177'14.
- Crude Oil - Crude oil took out Monday's high above $40 and then corrected – a break above $41.68 is possible into the Full Moon Weekend.
- Dollar Index – The USD peaked at 97.8 at the open and then pulled back hard giving the PM sector a boost.
TURNING POINT DAY
The turn windows for this week are 6/29 and 7/1.