Market Observations for the Week: The SPX bounced on Thursday with weak breadth – we may see another pullback attempt into early Friday. Crude oil bounced late Thursday on news that the US shot down an Iranian drone trending close to a US naval ship. After pulling back to $1416 early Thursday, gold blasted through $1431 and closed above $1440 giving us another buy signal.
7/18/19 (Commentary for Thursday) The SPX gave us a bounce late, but the market breadth was weak – a pullback into early Friday should give us a better long trade opportunity. Crude oil got a rally late in the session when the US Navy shot down an Iranian drone and the XLE (energy stocks) helped carry the SPX higher into the close. 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 2973 on Thursday before we bounced. 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(set to start on 7/31) – 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 got a retracement bounce on Thursday after the US downed an Iranian drone. Led by gold stocks and silver, gold rallied above $1443 Thursday in a 5th wave and closed the session above $1440 – this is bullish for a quick move to $1500. The USD declined impulsively on Thursday and helped to give the PM sector a big day.
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Big Picture on Stocks (UPDATED) – The SPX tested 3024 early Monday and finished 5-waves up on the hourly chart. We are 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 closed above $1440 on Thursday – this should lead to a quick test of $1500.
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Stocks – The SPX rallied late Thursday aided by a bouncing oil sector – a pullback early Friday could give us a better long setup.
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Gold – Led by gold stock and silver, gold reversed higher after the Full Moon/solar eclipse and closed above $1440 on Thursday – we should get 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. Silver closed above $16.20 on Thursday and continues to move higher.
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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 got a retracement bounce late Thursday when the US shot down an Iranian drone.
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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 96.7 and gave the PM sector a big boost on Thursday.
TURNING POINT DAY
The turn window for this week is 7/16-7/17.
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