Market Observations for the Week: This is a big week for the SPX and the PM as we approach the 7/31 New Moon/Fed rate cut day – we could see a fast move up to our targets of SPX 3100 and gold $1500.
7/28/19 (Commentary for Sunday) The /ES and /NQ are pulling back into early Monday – we are looking for a potential short-term high in the 7/31-8/1 Full Moon Timing Window. The market indices are advancing despite weak breadth numbers which confirms our bias for new highs above SPX 3028 next week. After a mid-July correction into 7/19, we still have our target of SPX 3100 by August/September – 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 $58 before falling to $55.32 on Wednesday and then coiling in a triangle into Sunday – we are looking for a reversal up by the 7/31 New Moon. Gold spiked out to $1437 Sunday evening – a close above $1431 on Monday would be a buy signal. The USD hit our target of 98 on Friday and started a correction.
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Big Picture on Stocks (UPDATED) – We are getting close to an important summer high by the 7/31 New Moon and Fed rate-cut day. Our target of SPX 3100 is in play next week.
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Big Picture on PMs (UPDATED) – Gold gave us a 1-2, i-ii rally on the 5-min chart from the $1411 low on Wednesday – we then pulled back into the 8-day Fibonacci step out from the 7/18 all-time high before exploding higher Sunday night.
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Stocks – The SPX is on a run into the 7/31 New Moon/ Fed rate cut day – we plan to buy dips.
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Gold – Gold spiked above $1437 late Sunday – a close above $1431 on Monday would be a buy signal.
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Silver – We saw “big prints in SLV in the Dark Pool” last week – this means that silver is moving from “weak hands” to “strong hands” here and should accelerate its move up. A back test to $16.20 is underway. We favor the silver catch up trade over gold here.
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Bonds – Bonds tested 155’10 and may have ended an EW a-b-c upside correction – we got to 155’08 Thursday before reversing down hard.
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Dollar Index – The USD broke above 98 on Friday before a small correction – higher prices look likely.
TURNING POINT DAY
The turn window for this week is 7/31-8/01 – the New Moon/Fed rate cut day.
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