Folks,
Market Observations for the Week: The FOMC minutes came through with a resolute Fed tone to raise rates to combat sticky inflation. The SPX declined into the FOMC minutes and did bounce some, but the stock indexes were not especially volatile for a Fed day. The SPX has a symmetry target of 4234 and we may see that early tomorrow. Bitcoin declined to 23145 overnight and that suggests a weaker SPX on Thursday’s open. Crude oil tested $85.73 on Tuesday but only gave us a weak bounce into today. Gold continued to sub-divide its C-Wave down and tested $1773.9 before bouncing higher overnight. The USD put in a DCL (Daily Cycle Low) on 8/10 and appears to be coiling for a move higher.
8/17/22 (Commentary for Wednesday) The SPX tested its 200-dma and started a pullback into the FOMC minutes on Wednesday. The SPX correction has a symmetry target of 4234 which could be reached early tomorrow. With multiple TRIN-5 SELL SIGNALS and an Option Premium Ratio SELL SIGNAL, the SPX is as overbought as any time in 2022 but this rally appears to have staying power. Our bias is for a symmetry correction to test 4234 by early Thursday before starting a rally to test 4300+ by the 8/27 New Moon. The astro-finance has been extremely intense so far in August and the Uranus aspects have served to accelerate global markets higher. The fact that Bitcoin pulled back to 23149 overnight is suggesting a weak SPX open on Thursday. We still view the SPX run from 6/17 as a bear market rally but it could last into mid-September and venture above SPX 4400. Crude oil continues to impulse down, but some traders view $85 as a trading buy. The C-Wave down for gold continues to sub-divide down after the FOMC minutes and has tested $1773 so far. The USD gave us a DCL on 8/10 and so we are looking for more rally after the sideways correction ends. Our current holdings are ~80% cash and ~20% in physical gold/silver/platinum.
Big Picture on Stocks (UPDATED) – The SPX made an important ICL (intermediate cycle low) on the Fibonacci 5-month step out from the Jan high on 6/17 and we are now looking for this rally to last until the Fibonacci 8-month step out into September. After a quick pullback into Thursday that finds support near 4200, we could see the SPX rally to 4300+ into the 8/27 New Moon. 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 rallied impulsively from $1678 to $1824 on the 8/10 Full Moon but is now giving us a C-Wave down that has tested $1773 so far.
- Stocks – The SPX tested its 200-dma today at 4326 on Tuesday and started a pullback into the FOMC minutes today. We are looking for a symmetry correction to SPX 4234 early before a reversal higher.
- Gold – Gold is declining in a C-Wave that tested $1773 on Wednesday.
- Silver – Silver is testing $19.60 overnight.
- Bonds – Bonds may be tracing out a bear flag pattern here.
- Crude Oil – Crude oil tested $85.73 on Tuesday and only gave us a weak bounce into Wednesday which looks bearish for more decline.
- Dollar Index – The USD is coiling sideways for another leg higher.
TURNING POINT DAY
The turn window for this week is 8/15 which is the last day of the Full Moon Timing Window.
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