Folks,
Market Observations for the Week: The SPX made a low on Thursday and rallied into the Tuesday after a monthly expiration which is a “turn window”. Our bias is now for a reversal down on the SPX on Wednesday and just a 3-wave correction would be bullish for highs above SPX 3800. Bitcoin is coming down hard overnight to test 20000 again which argues for a weak open in the SPX on Wednesday. The Tuesday after a monthly option expiration is a turning point day in our work and we have a 3-star critical reversal day for the SPX on 6/21-6/22. Our next target of SPX 3500 could still be in play in the short-term. Gold rallied in 3-waves and tagged $1861 last week before reversing down to test $1828 overnight Tuesday. The USD is tracing out a large EW a-b-c correction after the Swiss central bank raised its rate by 50-basis points last week.
6/21/22 (Commentary for Tuesday) The SPX rallied hard into the 6/21-6/22 turn window on Tuesday and the E-mini is declining overnight. The SPX has a 3-star critical reversal day on June 21-22 and if it came in as a high on Tuesday that could be bearish for another leg down in the SPX this week. The SPX got historically oversold last week but the rebound from last Thursday was not obviously impulsive – we may need more washout down to 3500 this week before a substantial rebound. The SPX bounced from Thursday and rallied into the powerful Venus square Saturn aspect on Tuesday/Wednesday which could give us a reversal back down. Bitcoin is testing 20000 again overnight Tuesday and this gives the SPX a negative bias for early Wednesday. Crude oil fell to test $105 overnight Tuesday and appears to be sub-dividing down impulsively – we could be doing a C-Wave down from the B-Wave top at $123.57 on 6/14. Gold bounced in 3-waves to test $1861 after the Fed rate hike before reversing down to test $1828 overnight Tuesday. The USD appears to be tracing out a complex correction and is testing 104.71 Tuesday night. Our current holdings are ~80% cash and ~20% in physical gold/silver/platinum.
Big Picture on Stocks (UPDATED) – Last week’s SPX action confirmed that the first leg down in the 2022 bear market may still be ongoing. Longer term, the SPX could give us a 20%-50% correction by spring 2023 as the 20-yr cycle low bottoms and the US economy slows to a recession. We favor a high percentage of cash for capital preservation.
Big Picture on PMs (UPDATED) – Gold bounced to $1861 after the 50-basis rate hike from the Fed and then declined to $1828 overnight Tuesday. Gold gave us 5-waves down from $1882.5 on 6/10 and just a 3-wave bounce today to $1861 on Thursday which is bearish.
- Stocks – The SPX rallied hard into our turn window today and the E-mini is rolling over overnight Tuesday. The SPX is historically oversold but the 6/21-6/22 3-star critical reversal window could have come in as a high today – how we trade Wednesday will enlighten us.
- Gold – Gold rallied in a 3-wave bounce and tested $1861 on 6/16 before pulling back Tuesday night to test $1828.
- Silver – After testing $22 on Tuesday, silver is falling overnight to test $21.34.
- Bonds – Bonds started to rally overnight as the E-mini sells off.
- Crude Oil – Crude oil declined to $105 overnight Tuesday and appears to be in a large C-Wave down from the Full Moon high at $123.68 on 6/14.
- Dollar Index – The USD declined in 3-waves after the Swiss central bank raised its rate by 50-basis point on Thursday and the correction appears to be going complex.
TURNING POINT DAY
The turn window for this week is 6/21-6/22.
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