Folks,
Market Observations for the Week: The “Venus square Saturn” on June 18 did give the SPX a large rally last week that tested 3900 near Friday’s close. The mild, sideways correction in the E-mini futures from Wednesday into Thursday was the tip off for more rally in the SPX into the weekend. The SPX may have started a 3rd wave higher from the 6/16 low at 3637. Bitcoin is trading sideways near 2100 overnight Sunday. The Biden-led ban on accepting Russian gold imports gave gold a rally overnight Sunday. USD continued to trade in a tight range around 104.
6/26/22 (Commentary for Sunday) The E-mini is trading above 3900 overnight Sunday and may top out early Monday before a pullback into Tuesday. Last week’s decline in the SPX into Friday the 6/18 Venus square gave us a reversal higher. We would not be short the SPX, NDX or IWM here. We may be seeing another large bear market rally that could take us above SPX 4000 into Friday’s holiday weekend. Bitcoin followed the SPX higher and is coiling around 21000 overnight Sunday. Crude oil is bouncing in a corrective pattern. We could be doing a C-Wave down from the B-Wave top at $123.57 on 6/14 that could test $87-$90. The GDX tested multi-month lows at 28.64 last week and bounced after reversing a spike lower early Friday. The USD appears to be tracing out a complex correction and is holding up near its Person’s pivot of 104.41 overnight Sunday. Our current holdings are ~80% cash and ~20% in physical gold/silver/platinum.
Big Picture on Stocks (UPDATED) – The SPX broke higher above 3900 on Friday and the tape reversed up from 3923. 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 stocks are underperforming gold here and that may relegate gold to a choppy sideways trading range in the near term. Weakly trending gold stocks may imply more weakness in the SPX.
- Stocks – The E-mini rallied in an EW 5-waves higher into the 6/21-6/22 turn window and then gave us a mild 3-wave correction into Thursday. The run higher late Thursday may be the start a 3rd wave higher that could run higher into the 7/4 holiday weekend.
- Gold – The GDX undercut multi-month lows at 28.65 and reversed higher on Friday.
- Silver – Silver continues in its trading range under $22 but the silver COTs continue to look strong.
- Bonds – Bonds continued to rally as the 10-yr US rate declined in 5-waves down on the hourly chart.
- Crude Oil – Crude oil 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 6/16 but is still holding up near 104.
TURNING POINT DAY
The turn window for this week is 6/27-6/28.
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