Folks,
Market Observations for the Week: Today the SPX traded an inside day to yesterday’s FOMC day but the SPX is still in correction mode and could still target a symmetry correction to 4234 into option expiration Friday. Bitcoin is rolling over and testing 22660 overnight and that could be leading the way lower for the SPX on Friday’s open. Crude oil rebounded to test $91 but the trend still looks down. Gold continues to sub-divide its C-Wave down and is testing $1766 overnight as the USD spikes to 107.72. The USD put in a DCL (Daily Cycle Low) on 8/10 and appears ready to move higher.
8/18/22 (Commentary for Thursday) The SPX tested its 200-dma and started a pullback into the FOMC minutes on Wednesday. The SPX, NDX and IWM all gave us a Negative Volume Reversal day on Wednesday and the correction could go past Option Expiration Friday. The SPX is as overbought as any time in 2022 but this rally appears to have staying power as dip buyers are buying the pullbacks. Our bias is for a symmetry correction to test 4234 by early Friday 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 22060 overnight is suggesting a weak SPX open on Friday. 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 rebounded to test $91, but the trend still looks down. The C-Wave down for gold continues to sub-divide down and tested $1766 so far overnight. The USD gave us a DCL on 8/10 and we are seeing 107.72 overnight which is pressuring gold. 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 $1766 overnight.
- Stocks – The SPX tested its 200-dma today at 4326 on Tuesday and started a pullback into the FOMC minutes. The SPY, QQQ, and IWM all gave us a Negative Volume Reversal Day down on Wednesday which set a negative tone. The SPX traded just an inside day on Thursday. We are looking for a symmetry correction to SPX 4234 early Friday before a reversal higher.
- Gold – Gold is declining in a C-Wave that is testing $1766 overnight.
- Silver – Silver is pulling back hard overnight to test $19.22 as the USD spikes.
- Bonds – Bonds may be tracing out a bear flag pattern here that is starting to break down.
- Crude Oil – Crude oil tested $91 but the trend still looks down to us.
- Dollar Index – The USD is making multi-week highs at 107.73 overnight.
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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