Market Observations for the Week: The SPX and NDX appear to be coiling into the 7/31 New Moon/Fed rate cut – AAPL’s earnings after the market on Tuesday will be important. Gold tested $1440 late in the day and closed above $1431 (an important weekly trendline) – is this another false breakout attempt?
7/29/19 (Commentary for Monday) The SPX and NDX appear to be coiling into the Fed rate cut decision on Wednesday and AAPL’s earnings after the close on Tuesday should have an impact. The market indices are advancing despite weak breadth numbers which confirms our bias for new highs above SPX 3028 this 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 is trying to pop into the 7/31 New Moon – we may see crude oil test $58 into the 7/31 New Moon. Gold spiked to $1440 Monday evening – a close above $1431 was a buy signal in our work – our bias is for a B-Wave test of $1455 by the 7/31 New Moon. The USD continues to grind higher and reached 98.20 early Tuesday.
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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 may be in play this 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 coiling into the 7/31 New Moon/Fed rate cut day – we plan to buy dips in financials and the semis.
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Gold – Gold spiked above $1437 late Sunday – then we closed Monday above $1431 which is 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 98.20 on Monday – another new high for the rally.
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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