Folks,
Market Observations for the Week: The SPX got to 3999.29 late on today’s session but Bitcoin diverged to a lower high. Today’s turn window is based on the 34-day Fibonacci step out from the 6/17 low which is important to determine trend in the SPX. Just a 3-wave corrective pullback from this turn window would be bullish for further rally above 4000. Our solar-lunar tables may be hinting at a trending move here in the NDX and that most likely would be down. Crude oil pulled back hard today and appears to be reversing lower after just a 3-wave rally from the Full Moon. Gold tested $1675 and then bounced $40, however, the GDX underperformed the yellow metal. After an EW 5-waves down on the hourly chart, the USD only got a weak bounce which is bearish.
7/21/22 (Commentary for Thursday) The SPX got to 3999 late in the 7/21 turn window as market internals continue to improve. The SPX clearly rallied 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 move above SPX 4000. Bitcoin diverged from the SPX making a lower high. Bitcoin pulled back in 5-waves overnight Wednesday and that could be predicting weakness for the SPX early Friday. Crude oil rolled over today and may be heading down impulsively. Gold tested $1675 and then bounced $40 while the gold stocks underperformed. 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 continued to hold up into the 7/21 turn window and only a 3-wave correction tomorrow would keep us bullish for higher highs above 4000. 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 tested $1675 support today and spiked up $40. The GDX underperformed.
- Stocks – The SPX got to 3999 near the close today. Just a 3-wave correction in the SPX tomorrow argues for higher highs into next week’s New Moon.
- Gold – Gold couldn’t hold $1720 and tested $1675 today before bouncing $40.
- Silver – Silver is trending sideways here and holding above $18.51.
- Bonds – Bonds rallied on Thursday and tested 141’03 overnight.
- Crude Oil – Crude oil may be rolling over here.
- 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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