Folks,
Market Observations for the Week: The SPX continues to grind higher into the 7/21 turn window from the 34-day Fibonacci step out from the 6/17 low. The SPX appears to be sub-dividing higher in a bullish way and tested 4000 today. Just a 3-wave corrective pullback from this turn window would be bullish for a test above 4000. Our solar-lunar tables predicted big volatility again on Wednesday and we got that. Bitcoin continued to trend higher and tested 24300 before reversing down. Crude oil appears to want to sub-divide higher. Gold is treading sideways just above important support at $1700. Gold is falling to test $1687 overnight – a test of $1675 could be close at hand. Failing to recover key support at $1720 put gold in a weak technical position. After an EW 5-waves down on the hourly chart, the USD only got a weak bounce which is bearish.
7/20/22 (Commentary for Wednesday) The SPX continued to grind upward into the 7/21 turn window as market internals continue to improve. The SPX is clearly rallying into the 34-day Fibonacci step out from 6/17 on 7/20-7/21 and we expect a correction. The nature of the correction will enlighten us – just a 3-wave correction will suggest a test above SPX 4000. Once again Bitcoin led the market higher today and tested its R1 resistance pivot at 24300. Bitcoin pulled back in 5-waves overnight Wednesday and that could be predicting weakness for the SPX early Thursday. Crude oil traded sideways today and may be trying to sub-divide higher above $101. Gold fell overnight Wednesday to test $1687 – a test of $1675 may have started. The USD declined in 5-waves from its 109.26 high last week and only gave us a weak bounce which is bearish. The Euro has made an important low. Our current holdings are ~80% cash and ~20% in physical gold/silver/platinum.
Big Picture on Stocks (UPDATED) – The SPX rallied back from Monday’s decline and should hold up into the 7/20-7/21 turn window before a correction. 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 is still finding resistance at $1720 and testing $1700 support. A washout to test $1675 is likely soon.
- Stocks – The SPX continues to grind higher toward 4000 as we approach the 7/21 turn window. Just a 3-wave correction would be bullish.
- Gold – Gold couldn’t hold $1720 and is now testing $1675.
- Silver – Silver is trending sideways here and holding above $18.51.
- Bonds – Bonds continue to move sideways here as the US 10-yr note hangs near 3%.
- Crude Oil – Crude oil continues to sub-divide higher and its 3-wave rally from last week’s Full Moon may have more to go.
- Dollar Index – The USD fell in 5-waves from 109.26 to 106.41 and just gave us a weak bounce which is bearish. The Euro has made a major low.
TURNING POINT DAY
The turn window for this week is 7/21, the 34-day Fibonacci step out from the 6/17 low.
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