Folks,
Market Observations for the Week: The SPX took out Friday’s low and touched 4017 but the reversal looked corrective. It appears likely that the SPX will make lower lows by Tuesday/Wednesday. Crude oil spiked to multi-week highs at $97.37 and this drove the oil stocks sharply higher. Gold took out multi-week lows and tested $1731 before bouncing. The USD made highs for the year at 109.48 overnight Sunday.
8/29/22 (Commentary for Monday) The SPX made lower lows than Friday but only bounced correctively which suggests lower prices by Tuesday/Wednesday. So far, the reversal signature from Venus going into Opposition with Saturn Sunday night, has only been a corrective bounce which is bearish. The summer rally in stocks appears to have peaked out at SPX 4325 on a test of its 200-dma and the downtrend may have resumed. On the last day of the New Moon Timing Window, crude oil made a multi-week high at $97.37 and the oil stocks had a big day. After testing $1778 on Thursday, gold pulled back to undercut its $1740 low and tagged $1731 before bouncing. The USD made highs for the year at 109.48. Our current holdings are ~80% cash and ~20% in physical gold/silver/platinum.
Big Picture on Stocks (UPDATED) – The SPX made an EW 5-wave decline from 8/16 at 4326 into Monday at 4017. A 3-wave corrective bounce appears to have emerged today which is the 13-day Fibonacci step out from 8/16 – lower lows this week are likely. 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 touched $1778 early Thursday before rolling over to tag $1731 early Monday as the USD made highs for the year.
- Stocks – The SPX summer rally appears to have peaked out on 8/16 at 4326. After a touch of its 200-dma, the SPX may have renewed its downtrend.
- Gold – Gold tested $1778 early Thursday and then rolled over in 3-waves to test $1731 early Monday before bouncing.
- Silver – Silver gave us an undercut low and tested $18.40 this morning before bouncing.
- Bonds – Bonds made multi-week lows at 135’23 early Monday before bouncing. Rates may be resuming their uptrend.
- Crude Oil – Crude oil spiked to $97.37 on Monday and energy stocks had a big day.
- Dollar Index – The USD made highs for the year at $109.48 and this pressured the PM sector.
TURNING POINT DAY
The turn window for this week is 8/29 which is the tail end of the New Moon Timing Window and the 13-day Fibonacci step out from 8/16.
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