All Star Market Timing

The Daily JDV Market Timer - September 29, 2022

Folks,

Market Observations for the Week: A hotter than expected headline and core PCE inflation report sank the market today and “higher for longer” comments from several Fed speakers gave us another down day in the SPX and NDX. However, we saw bullish divergences today as both the Russell 2000 and the DJIA refused to make lower lows while the NDX and SPX did. More importantly, even with hotter than expected PCE inflation data, the US bond rallied and the 10-yr US rate closed at 3.747% as global rates attempt to correct. Yesterday was a one-day wonder for the SPX and it got retraced but both stocks and bonds may have made some kind of temporary exhaustion low this week. Bitcoin is still contained by 20000 resistance and may be tracing out a bear flag pattern. Crude oil tested $83 today as the SPX made a lower low.  Gold held up to $1670 today as the USD made a 3-wave correction to 111.75.

9/29/22 (Commentary for Thursday) While the E-mini held above Wednesday’s low, the SPX totally retraced its rally from yesterday. However, the Russell 2000 and the DJIA held above their Wednesday lows for a case of bullish divergence. The US long bond also rallied today in defiance of the hotter than expected PCE inflation report. Well, the E-mini gave us an EW 5-waves down into early Wednesday and our cycle work argues that the SPX could bounce into early next week. The 10-yr US rate tested 4.0% on Wednesday and today closed at 3.747%, a short-term positive. The Cumulative NYSE New Highs–New Lows indicator fell to new lows today and needs to turn up for a sustained rally. At this point we continue to stay in cash and watch the action as the SPX tested 3600 today but closed above 3636 at 3640.47 which was another positive sign on today’s tape. Bitcoin continues to struggle below 20000 resistance and looks like it is tracing out a bear flag pattern. Crude oil tested $83 and could still work higher here. Gold actually made higher highs to $1673 as the USD fell in 3-waves to 111.75 – both gold and silver had pattern completions on the hourly timeframe on Wednesday.  We are ~80% cash and ~20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) – The SPX totally retraced the gains from yesterday but the Russell 2000 and DJIA both held up for bullish divergence – we could see the SPX bounce into next week. 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) – Despite hotter than expected PCE data the US bond held up and the USD fell giving gold an opportunity to hold up at $1673. Still, we expect gold stocks to test their Covid lows by March 2023 as the 8-yr gold cycle and the 20-yr stock market cycle converge on the downside. Central bankers are loading up on gold this year as global physical inventories continue to decline but higher nominal US rates can still pressure the PM sector down.

• Stocks – The SPX and NDX retraced yesterday’s rally but the Russell 2000 and DJIA both held up for bullish divergence. We could see the SPX bounce into next week.
• Gold – Gold is holding up around $1673 overnight as the USD corrects.
• Silver – Silver continues to consolidate its rally from Wednesday.
• Crude Oil – Crude oil tested $83 and could move higher into Friday.
• Dollar Index – The USD dropped to 111.75 in a 3-wave correction.

TURNING POINT DAY

The turn window for this week is 9/26-9/27.

The Daily JDV Market Timer - September 28, 2022

Folks,

Market Observations for the Week: The E-mini was down big into 5:00 AM EDT with rising global rates spooking global equities but then the Bank of England started to buy long-duration British government and the global stock markets reversed up from a very oversold condition. Bear markets are known for their fierce one-day wonder rallies so how we trade on Thursday’s will determine the short-term market trend. The SPX should hold up until the PCE inflation report early Friday especially if AAPL regains its footing. Bitcoin bounced to 19671 on Thursday but is still contained by 20000 resistance. Two back-to-back days of huge total stock option volume on Monday and Tuesday did bring a rally early Wednesday – the stock market was due for a rally. Crude oil rallied with the SPX on Wednesday as the USD fell back on the BOE support of the British support.  Gold gave us an undercut low to $1622 and then rallied $50 into late afternoon.

9/28/22 (Commentary for Wednesday) The SPX gave us a huge rally after the BOE intervened to buy log-dated British sovereign debt. Is this the start of a more substantial oversold rally?  Well, the E-mini gave us an EW 5-waves down into early Wednesday and our cycle work argues that the SPX could hold up into Friday when the PCE inflation report comes out. The 10-yr US rate tested 4.0% yesterday and today pulled back to 3.7%, a huge move. The bond market got very over-extended to the downside and is due a retracement rally. The 52-wk New Low list tested levels not seen since mid-June and started to rebound hard today as the NYSE became very oversold in the past week. At this point we continue to stay in cash and watch the action as the SPX tests 3636 – a failure to hold SPX 3636 on a closing basis would argue for more weakness. Bitcoin’s inability to rally above 20000 today, on a huge market day, makes us cautious. Crude oil bounced to test $82 but the trend still looks down. Gold undercut $1627.7 and tagged $1622 before reversing higher by $50 – both gold and silver had pattern completions on the hourly timeframe.  We are ~80% cash and ~20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) – The SPX rebounded hard after the BOE stepped in to support the British Pound by buying long-dated British government debt. 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) – The 10-yr US rate spiked to 3.99% on Tuesday but pulled back to 3.7% on Wednesday after the BOE started buying British GILTs. We expect gold stocks to test their Covid lows by March 2023. Central bankers are loading up on gold this year as global physical inventories continue to decline but higher nominal US rates can still pressure the PM sector down.

• Stocks – After two huge stock option volume days on Monday and Tuesday, we got a big reversal on Wednesday in global bond and stock markets. Bear markets are known for one-day wonder events in the stock market. Cycles argue that the SPX could hold up into Friday’s PCE report.
• Gold – Gold touched $1622 and then rallied by $50 as the BOE bought British bonds.
• Silver – Silver pulled back to $1788 before roaring back to test its R2 resistance pivot at $18.96.
• Crude Oil – Crude oil roared to $82.3 after the BOE intervened to buy British GILTs.
• Dollar Index – The USD got to 114.78 early Wednesday before the BOE intervention brought it down hard to 112.61.

TURNING POINT DAY

The turn window for this week is 9/26-9/27.

The Daily JDV Market Timer - September 27, 2022

Folks,

Market Observations for the Week: The early SPX rally on Tuesday faded after just an EW a-b-c bounce and the SPX undercut the 6/12 3636 low. After spiking to 20400 early Tuesday, Bitcoin fell hard to test 18400, its S! support pivot, overnight Tuesday. Two back-to-back days of huge total option volume on Monday and Tuesday suggest a SPX rally to start on Wednesday. Crude oil trended sideways on Tuesday and its trend remains down. Gold could also get an undercut low below $1627.7 before a rally.

9/27/22 (Commentary for Tuesday) The SPX gave us another head fake rally early Tuesday which failed leading to the undercut of the 6/16 low at 3636 – is this the start of more downside to 3500 or a more substantial oversold rally?  The 52-wk New Low list is testing levels not seen since mid-June. At this point we continue to stay in cash and watch the action as the SPX tests 3636 – a failure to hold SPX 3636 on a closing basis would argue for more weakness. The bond market looks overextended to the downside here but continues to post lower lows – the poor 5-yr US bond auction pressured bonds late today. Bitcoin’s inability to hold above 20000 today was a sign of weakness. Crude oil went sideways on Tuesday – a move under $76.25 looks likely. Gold could also undercut $1627.7 before reversing higher early Wednesday.  We are ~80% cash and ~20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) – The SPX undercut its uptrend line from the Covid low below 3800 on Fed Day and continued to decline into Tuesday – however, a rebound rally is due on Wednesday. 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) – The 10-yr US rate spiked to 3.99% on Tuesday and that kept the downward pressure on gold to $1627.7. We expect gold stocks to test their Covid lows by March 2023. Central bankers are loading up on gold this year as global physical inventories continue to decline but higher nominal US rates can still pressure the PM sector down.

• Stocks – With two huge option volume days on Monday and Tuesday, we are looking for a tradable low on Wednesday.
• Gold – Gold got hammered by rising rates and the rising USD – we are looking for a rebound rally to start early Wednesday.
• Silver – Silver is breaking down to $1801.1 overnight Tuesday.
• Crude Oil – Looking for crude oil to undercut $76.25 early Wednesday and then get an oversold bounce.
• Dollar Index – The USD broke out to new highs at 114.7 overnight Tuesday.

TURNING POINT DAY

The turn window for this week is 9/26-9/27.

The Daily JDV Market Timer - September 26, 2022

Folks,

Market Observations for the Week: We’re still expecting a SPX trading bounce to start early Tuesday. Bitcoin is tagging 20295 overnight Monday and that is a bullish tell for the SPX early Tuesday. Two back-to-back days of huge total option volume suggest a SPX rally to start early Tuesday. Crude oil needs one more undercut low below $76.25 before it gets a rebound. Gold could also get an undercut low below $1627.7 before a rally.

9/26/22 (Commentary for Monday) The SPX looks ready to follow the lead of Bitcoin overnight (+20000) and stage an oversold rally early Tuesday. The 52-wk New Low list is testing levels not seen since mid-June. At this point we continue to stay in cash and watch the action as the SPX tests 3636. The bond market looks overextended to the downside here and could give us a relief rally by Tuesday. Bitcoin is spiking above 20000 overnight Monday and is trying to lead the way for the SPX early Tuesday. Crude oil could give us one more undercut low below $76.25 before its oversold rally starts on Tuesday. Gold could also undercut $1627.7 before reversing higher early Tuesday.  We are ~80% cash and ~20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) – The SPX undercut its uptrend line from the Covid low below 3800 on Fed Day and continued to decline into Monday – however, a rebound rally is due early Tuesday. 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) – The 10-yr US rate spiked to 3.90% Monday and that kept the downward pressure on gold to $1627.7. We expect gold stocks to test their Covid lows by March 2023. Central bankers are loading up on gold this year as global physical inventories continue to decline but higher nominal US rates can still pressure the PM sector down.

• Stocks – The SPX is continuing its test of the 6/16 low at 3636 but we expect a rebound rally to start early Tuesday. With the put/call ratio spiking to 1.36 on Friday, we are looking for a tradable low on Mon/Tues.
• Gold – Gold is getting hammered by rising rates and the rising USD – we are looking for a rebound rally to start early Tuesday.
• Silver – We may be seeing a pattern completion in silver overnight Monday and are looking for a rally early Tuesday.
• Crude Oil – Looking for crude oil to undercut $76.25 early Tuesday and then get an oversold bounce.
• Dollar Index – The USD is consolidating around 114 overnight Monday and is pressuring the PM sector.

TURNING POINT DAY

The turn window for this week is 9/26-9/27.

The Weekly JDV Market Timer - September 25, 2022

Folks,

Market Observations for the Week: Closing below SPX 3800 on Fed Day was bearish and the market continued to wash out into Friday with increasing new 52-week lows. The SPX tested the 6/16 low on Friday and the E-mini is bouncing into Sunday night. We’re looking for the SPX to bottom Mon/Tues and then bounce. Spiking put/call ratios suggests that a tradable low is near. Bitcoin remains below 19000 overnight Sunday and a close above 20000 is needed to turn this sector positive. Crude oil is testing $78 overnight Sunday. Pressured by a USD testing 114 overnight Sunday, gold finished a 5-wave move down and tested $1633.4.

9/25/22 (Commentary for Sunday) The SPX continued to sub-divide down on Friday and is reaching to test the 6/16 low at 3636 as the 10-yr US yield made new highs for the year at 3.773%. The IWM continued to extend down and tested 165 as the market breadth continued to worsen. The 52-wk New Low list is testing levels not seen since mid-June. At this point we continue to stay in cash and watch the action as the SPX tests 3636. The bond market looks overextended to the downside here and could give us a relief rally by Tuesday. Bitcoin remains below 19000 overnight Sunday and that is a bearish tell for the SPX early Monday. During a Fed week the SPX and gold have a seasonal tendency to decline into Fed Wednesday, which we did, but both continue to decline into Sunday evening with the USD breaking to 114 and fears of deflation taking center stage. Crude oil continues to trade weakly today and is testing $78 overnight Sunday. Gold is testing $1634 Sunday evening as the USD spikes to test 114.57.  We are ~80% cash and ~20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) – The SPX undercut its uptrend line from the Covid low below 3800 on Fed Day and continued to decline into the weekend – this is bearish. 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) – The 10-yr US rate spiked to 3.773% early Friday and gold got pressured down below $1661.5 and failed to close above $1675 support – this is bearish and gold is now testing $1633 overnight Sunday. Central bankers are loading up on gold this year as global physical inventories continue to decline but higher nominal US rates can still pressure the PM sector down.

• Stocks – The SPX closed below 3800 on Fed Day and the stock market continued down to test the 6/16 low at 3636 on Friday. With the put/call ratio spiking to 1.36 on Friday, we are looking for a tradable low on Mon/Tues.
• Gold – Gold closed below major support at $1675 on Thursday and is now test $1833 Sunday night.
• Silver – Silver is testing its S1 support level at $1854 late Sunday.
• Crude Oil – Crude oil continues to trade weak and is tagging $78 overnight Sunday.
• Dollar Index – The USD is breaking out above 114 overnight Sunday and is pressuring the PM sector.

TURNING POINT DAY

The turn window for this week is 9/26-9/27.

The Daily JDV Market Timer - September 22, 2022

Folks,

Market Observations for the Week: Closing below SPX 3800 on Fed Day was bearish and the large closing TRIN at 2.74 on Wednesday gave us hardly a bounce. The Initial Jobless Claims report early Thursday continued to illustrate the vibrant job market that the Fed is trying to reign in. Bitcoin is testing 19400 overnight Thursday but a close above 20000 is needed to turn this sector positive. Crude oil continues to trend bearishly at $83.07. Gold continues to trace out what could be a “bull flag” pattern. The USD reached 111.81 early Thursday before correcting the rest of the session.

9/22/22 (Commentary for Thursday) The SPX continued to sub-divide down as the 10-yr US yield made new highs for the year at 3.716%. The Russell 2000 gave us an EW 5-waves down from Tuesday and that should give us a bounce early Friday. The 52-wk New Low list is breaking out to levels not seen since mid-June. At this point we will stay in cash and see what develops. Bitcoin touching 19400 overnight Thursday is positive for the SPX early Friday. During a Fed week the SPX and gold have a seasonal tendency to decline into Fed Wednesday, which we did, but both continued to decline on Thursday with the USD breaking to multi-year highs and fears of deflation taking center stage. Crude oil continued to trend weakly today and is falling below $83 overnight. Gold may be tracing out a bull flag pattern but the rising 10-yr rate keeps the PM sector down. The USD made a higher high at 111.8 but then consolidated the session away.  We are ~80% cash and ~20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) – The SPX undercut its uptrend line from the Covid low below 3800 and continued to decline on Thursday – this is bearish. 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) – The 10-yr US rate spiked to 3.716% on Thursday and gold got pressured down below $1661.5 and failed to close above $1675 support – this is bearish. Central bankers are loading up on gold this year as global physical inventories continue to decline but higher nominal US rates can still pressure the PM sector down.

• Stocks – The SPX closed below 3800 on Fed Day and the stock market continued down on Thursday.
• Gold – Gold may be tracing out a bull flag and closed above major support at $1675.
• Silver – Silver appears to be coiling for a move higher.
• Crude Oil – Crude oil is trading weak and is drifting below $83 Thursday night.
• Dollar Index – The USD is breaking out above 111 and is pressuring gold overnight.

TURNING POINT DAY

The turn window for this week is 9/19-9/20.

The Daily JDV Market Timer - September 21, 2022

Folks,

Market Observations for the Week: The Fed raised 75 basis points as expected and the SPX tried to bounce only to be sold off hard into the close. Closing below the trendline that connects the Covid low on 3/23/2020 with the 6/17 low at 3636 which equates to closing below SPX 3800 post-Fed puts the stock market at peril early Thursday. Bitcoin testing 18000 overnight is a negative tell for the SPX early Thursday. Crude oil is testing $82.37 overnight – a weak showing on a day that Putin tried to amp us his rhetoric against Ukraine. Gold gave us an undercut low below $1661.5 and that could have made an important low on Fed Day. The USD is breaking out above 111.7 overnight and is pressuring gold and silver down Wednesday night.

9/21/22 (Commentary for Wednesday) The SPX appears to have done a sideways 4^th pattern from Friday and then did a 5^th wave down into the close - maybe. The $TRIN closed at 2.74 which is statistically bullish for Friday but the close below SPX 3800 and the increase in new 52-week lows argues for a continued breakdown on Friday. At this point we will stay in cash and see what develops. The fact that the 10-yr US rate reversed down hard in the last hour today is a bullish factor for the SPX but Bitcoin testing 18000 is a bearish tell. During a Fed week the SPX and gold have a seasonal tendency to decline into Fed Wednesday, which we did, but if both continue to decline on Thursday with the USD breaking to multi-year highs, fears of deflation will take center stage. Crude oil tagged $81.73 early Monday and may have finally finished a bullish “Running B-Wave correction” – but it needs to rally impulsively here to prove that a low is in. Gold needs to hold $1661 overnight or talk of deflation will make the rounds on Friday. The USD is in breakout mode above 111.7 and the PM sector is being pressured down. We are ~80% cash and ~20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) – The SPX undercut its uptrend line from the Covid low below 3800 on today’s close – this is bearish. 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) – The 10-yr US rate spiked to 3.62% early Wednesday and gold got pressured down below $1661.5 and failed to close above $1675 support – this is bearish. Central bankers are loading up on gold this year as global physical inventories continue to decline but higher nominal US rates can still pressure the PM sector down.

• Stocks – The SPX closed below 3800 which is bearish but the $TRIN closing at 2.74 is bullish for Friday – we are standing aside.
• Gold – Gold undercut $1661 after the Fed and finished below $1675 which is bearish  – gold has made four consecutive closes below $1700 which is a sign of weakness.
• Silver – Silver is holding up better than gold against the USD breakout above 111.
• Crude Oil – Crude oil may have finally finished a “Running B-Wave correction” at $81.73 early Monday but we need to see impulsive action higher or lower lows are possible.
• Dollar Index – The USD is breaking out above 111 and is pressuring gold overnight.

TURNING POINT DAY

The turn window for this week is 9/19-9/20.

The Daily JDV Market Timer - September 20, 2022

Folks,

Market Observations for the Week: The SPX made a low on Tuesday at 3827.54 but the pattern looks like a Running B-Wave that could make a lower low on Fed Wednesday. Bitcoin is coiling below its Person’s Pivot at 19075 overnight Tuesday. Crude oil is holding below its Person’s Pivot at $84.44 overnight. Gold closed below support at $1675 and so could retest $1661 tomorrow on Fed Day. The USD is making a B-Wave test of its 110.786 and that is pressuring gold overnight.

9/20/22 (Commentary for Tuesday) The SPX followed the E-mini and made a lower low on Tuesday at 3827.54. The SPX and NDX both gave us Negative Volume Reversal days on Thursday which was bearish leading into quad-witching Friday. The SPX cycle low we expected to land on Friday extended Tuesday. Bitcoin made multi-week lows at 18195 early Monday before reversing and leading the SPX higher into the close. During a Fed week the SPX and gold have a seasonal tendency to decline into Fed Wednesday. Crude oil tagged $81.73 early Monday and may have finally finished a bullish “Running B-Wave correction” before bouncing into Tuesday. Gold pulled back into Fed Wednesday and is testing $1670 overnight. The USD remains in correction mode but is testing 110.3 overnight. Our current holdings are ~80% cash and ~20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) – The SPX made a lower low on Tuesday at 3827.54. 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) – The 10-yr US rate spiked to 3.60% early Tuesday and gold got pressured down to tag $1670 below key support at $1675. Central bankers are loading up on gold this year as global physical inventories continue to decline but higher nominal US rates can still pressure the PM sector down.

• Stocks – The SPX made a lower low on Tuesday at 3827.5 but the Running B-Wave pattern has us looking for a lower on Fed Wednesday.
• Gold – Gold is wedging sideways and testing $1670 overnight – gold has made three consecutive closes below $1700 which is a sign of weakness.
• Silver – Silver may have finished a small EW a-b-c correction at $19.05.
• Crude Oil – Crude oil may have finally finished a “Running B-Wave correction” at $81.73 early Monday and then bounced into Tuesday.
• Dollar Index – The USD is in correction mode but giving us a B-Wave test of the 110.78 high.

TURNING POINT DAY

The turn window for this week is 9/19-9/20.

The Daily JDV Market Timer - September 19, 2022

Folks,

Market Observations for the Week: The SPX opened down on Monday, and we are cognizant that when declining into a monthly option expiration, the SPX tends to make a low by the following Tuesday and reverse higher. The cycle that was due to bottom on Friday extended into Monday. The E-mini made a low early Monday but the SPX did not which was a case of bullish divergence. Bitcoin made a multi-week low at 18195 early Monday and then reversed higher leading the SPX. Bitcoin is holding up overnight Monday which is a positive tell for the SPX early Tuesday. Crude oil continued down to $81.73 and perhaps finally finished a “Running B-Wave” correction which would be bullish for Tuesday. Gold appears to be doing a corrective bounce and so could retest $1661 soon. As the 30-yr fixed rate mortgage holds near 14-yr highs at 6.42%, the USD continued to correct above its S1 support pivot at 109.31.

9/19/22 (Commentary for Monday) After the bearish SPX close on quad-witching Friday below 3900, the E-mini made a low early Monday but the SPX did not for a case of bullish divergence. The SPX and NDX both gave us Negative Volume Reversal days on Thursday which was bearish leading into quad-witching Friday. The SPX cycle low we expected to land on Friday extended into early Monday. Bitcoin traded at 18195 early Monday before reversing and leading the SPX higher into the close. Bitcoin is holding up Monday evening which is a bullish tell for the SPX early Tuesday. Crude oil tagged $81.73 early today and may have finally finished a bullish “Running B-Wave correction” early Monday. After the 10-yr US rate tagged 3.5% early Monday, gold was able to bounce into the close and test $1689 – higher nominal rates are still a problem for gold. The USD remains in correction mode but is still holding above 109.3 overnight Monday. Our current holdings are ~80% cash and ~20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) – We closed below SPX 3900 on Friday and that looked like trouble for the SPX. However, the E-mini made an undercut low early Monday but the SPX did not for a case of bullish divergence. 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) – The 10-yr US rate spiked near 3.5% early Monday and gold got pressured down to tag $1668 before reversing again to close above key support at $1675. Central bankers are loading up on gold this year as global physical inventories continue to decline but higher nominal US rates can still pressure the PM sector down.

• Stocks – The E-mini made lower lows early Monday but the SPX did not and we may have seen a turn higher in our 9/19-9/20 turn window – how we trade on Tuesday will tell us.
• Gold – Gold tagged $1668 early Monday before reversing higher above key support at $1675.
• Silver – Silver tagged its lower VWAP at $19.23 early Monday before reversing higher to test $19.60 overnight.
• Crude Oil – Crude oil may have finally finished a “Running B-Wave correction” at $81.73 early Monday before tagging $85.62 overnight.
• Dollar Index – The USD is in correction mode but holding above 109.3 overnight Monday.

TURNING POINT DAY

The turn window for this week is 9/19-9/20.

The Weekly JDV Market Timer - September 18, 2022

Folks,

Market Observations for the Week: Quad-witching brought us extreme volatility as expected but we closed Friday below SPX 3900 which is bearish for the open on Monday. The cycle that was due to bottom on Friday may extend into Monday. Bitcoin is trading below 20000 overnight Sunday which is a negative tell for the SPX early Monday. Crude oil could give us an undercut low below $83.92 on Monday and finish a “Running B-Wave” correction which would be bullish. Gold tagged $1662 and then reversed fiercely to close at $1681 on Friday. As the 30-yr fixed rate mortgage holds near 14-yr highs at 6.35%, the USD continues to trace range correction around 109.6.

9/18/22 (Commentary for Sunday) On quad-witching Friday the SPX broke down out of its “bear flag” pattern and closed below 3900 which argues for more downside early Monday. The SPX and NDX both gave us Negative Volume Reversal days on Thursday which was bearish leading into quad-witching Friday. The cycle low we expected to land on Friday may extend to Monday. Bitcoin is trading below 20000 overnight Sunday which is a bearish tell for the SPX early Monday. Crude oil was close to finishing a bullish “Running B-Wave correction” on Friday. After the 10-yr US rate continued to hold at highs for the year, gold got beat down to tag $1662 before reversing higher to close at $1681 – above key support at $1675. The USD remains in correction mode but is still holding up to 109.6 overnight Sunday. Our current holdings are ~80% cash and ~20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) – We closed below SPX 3900 on Friday which argues for downside follow through on Monday. 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) – The 10-yr US rate remains near highs for the year and gold got pressured to tag $1662 on Friday before reversing high to close above key support at $1675. Central bankers are loading up on gold this year as global physical inventories continue to decline but higher nominal US rates can still pressure the PM sector down.

• Stocks – After the Negative Volume Reversal days for the SPX and NDX on Thursday, quad-witching closed the SPX below 3900 which sets us up for more downside early Monday.
• Gold – Gold tagged $1662 on Friday before reversing higher to $1682 and above key support at $1675.
• Silver – Silver fell to $1878 before reversing higher to $1961 late Friday – this could be an important reversal higher.
• Crude Oil – Crude oil is close to finishing a “Running B-Wave correction” at $84.50 which is bullish.
• Dollar Index – The USD is in correction mode but holding at 109.6 overnight Sunday.

TURNING POINT DAY

The turn window for this week is 9/19-9/20.