Folks,
Market Observations for the Week: The sell signals we got on Monday came to fruition Wednesday as the soaring COVID-19 infection rates in some southern states started spooking the market after a speculative run up into Monday's New Moon Timing Window. Monday was a 13-day Fibonacci step out from the 6/9 high and we got a short-term top early in the week. The selloff Wednesday was broad-based with all 11 market sectors down and all the major commodities lower. Crude oil tested $41.63 and entirely filled that gap from March before selling off into today. Gold tested $1796 pre-market, an 8-year high, and sold off $24 into the late afternoon – the GDX held up better than most market sectors. The USD rallied hard today as everything else got sold off.
6/24/20 (Commentary for Wednesday) Monday's Option Premium Ratio sell signal came through today with a big selloff. The SPX did give us a B-Wave test of the high on Monday and we may have started a C-Wave down that could undercut 2900 on a symmetry correction. Just a corrective bounce on the SPX on Thursday will argue for lower lows to come. After 5-waves higher on the hourly chart, crude oil touched $41.63 pre-market Tuesday and filled the gap from March on the continuous chart – we then sold off hard today like every major commodity. After a 3-wave correction from Monday's high, gold powered up into early Wednesday and made an 8-year high at $1796 – large real-time prints came in early today at IAU 16.98 which is an important gold proxy. The USD soared today and is looking to test 97.5 again. Strong, impulsive action here in the USD would argue for a short-term high in gold.
Big Picture on Stocks (UPDATED) – The SPX price action from the high of January 2018 to the low of March 2020 was a large Running B-Wave correction in Elliott Wave parlance. The NDX made a new all-time on 6/10 and has traced out a bullish "cup and handle" into the New Moon/solar eclipse – this is bullish. June 15 was the end of Wave A down of an EW a-b-c correction in the NDX– we may have seen a B-Wave top on Tuesday.
Big Picture on PMs (UPDATED) – Gold and silver gave us important lows on 6/18 and gold bounced to a 8-year high at $1796 early Wednesday while the GDX/GLD ratio continues to move higher – this is bullish action.
- Stocks – The SPX appears to need an undercut low early Thursday to finish 5-waves down on the hourly chart – how we rally after that will be enlightening.
- Gold – Gold pulled back correctively from Monday's high and then made an 8-year high at $1796 early Wednesday. The break higher in the GDX/GLD ratio is bullish for the PM sector.
- Silver – Silver stocks(SIL) held up well with the broad-based market selloff today and should continue to pull silver higher.
- Bonds - Bonds may be breaking out of a coil pattern on the hourly chart – TLT may be the play.
- Crude Oil - Crude oil filled the March gap at $41.63 and started a decline into Wednesday.
- Dollar Index – The USD bounced hard today and looks to test 97.5 again.
TURNING POINT DAY
The turn windows for this week are 6/22 and 6/24.