Market Observations for the Week: The SPX did not bounce into Wednesday, but instead finished an EW a-b-c pullback on the hourly into the close – a retracement bounce early Thursday is likely. Higher inventories gave crude oil a sell off that undercut $57 – the energy sector weighed down the SPX today. Led by silver, gold turned up after the Full Moon/lunar eclipse and reversed higher to test $1431 – a close above $1440 would be a buy signal.
7/17/19 (Commentary for Wednesday) Weighed down by the oil sector, the SPX declined into Wednesday’s close – a retracement bounce into early Thursday is likely. The TRIN-5 got to an even more oversold reading on Wednesday and argues for a rebound early Thursday. We looked for a SPX high on Monday around 3024 before a retracement to 2960 into the 7/16-7/17 Full Moon/lunar eclipse Timing Window – so far, we just made it to 2984 with a bounce likely early Thursday. After a mid-July correction, we still have our target of SPX 3100 by August – we DO expect the large sideways SPX consolidation pattern from January 2018 to be DECISIVELY taken out this summer before we roll over for a fall correction. Global markets are all about liquidity here and we have long predicted that the Fed will shift back to an easing stance at some point this summer – a crisis in the European banking system would evoke a quick easing or QE response from the US Fed. Crude oil tested $61 on 7/10 and gave us an undercut of $57 after the 7/16 Full Moon/lunar eclipse on Wednesday – we are looking for a retracement bounce on Thursday. Led by gold stocks and silver, gold rallied to test $1430 late Wednesday – a close above $1440 would be bullish for a quick move to $1500. The oversold USD finished an EW a-b-c correction and surged higher to test 97.5 on Tuesday.
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Big Picture on Stocks (UPDATED) – The SPX tested 3024 early Monday and closed 5-waves up on the hourly chart. We may be getting close to an important summer high by the 7/31 New Moon and Fed rate cut day.
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Big Picture on PMs (UPDATED) – Gold reversed higher after the Full Moon/lunar eclipse and tested $1430 late Wednesday – a close above $1440 would lead to a quick test of $1500.
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Stocks – The SPX pulled back in a 3-wave correction into Wednesday’s close and we’re looking for a retracement bounce on Thursday.
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Gold – Led by gold stock and silver, gold reversed higher after the Full Moon/solar eclipse and tested $1430 late Wednesday – a close above $1440 would send us to a quick test of $1500.
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Silver – We saw “big prints in SLV in the Dark Pool” on Tuesday – this means that silver is moving from “weak hands” to “strong hands” here and should accelerate its move up. We should see a test of $16.20 early Thursday.
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Crude Oil – Crude oil tested $61 on 7/11 and undercut $57 Wednesday after the 7/16-7/17 Full Moon/lunar eclipse – we are looking for a retracement bounce early Thursday.
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Bonds – Bonds may have finished the B-Wave of an EW a-b-c correction on the hourly chart.
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Dollar Index – The USD fell hard to 97 and gave the PM sector a big boost.
TURNING POINT DAY
The turn window for this week is 7/16-7/17.
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