Folks,
Market Observations for the Week: The SPX got its consolidation and pulled back modestly on Monday. However, with the absence of errant tweets from Trump and China playing nice until their 70th anniversary of the 1949 takeover on 10/1, global markets could catch their breath while the SPX could make new highs above 3027. Gold gave us a new high at $1566 as part of a “running B-Wave” corrective pattern but the C-Wave down is giving us an undercut of $1500 before a bounce until Friday’s Full Moon.
9/09/19 (Commentary for Monday) After up days on Thursday and Friday the SPX closed with negative TICK readings both days which predicted the start of a consolidation on Monday. After 5-waves up into Thursday, the market is set up to give us a pullback to 2950 or so. Timely announcements on BREXIT, Hong Kong and US-China trade supported the SPX rally into Friday but some kind of retracement was due. Bond yields have been rising and led to a big move in bank stocks today. The “out of favor” oil sector also caught a bid today as both crude oil and natural gas staged impressive rallies. Gold made new highs to $1566 in a “running B-Wave” corrective pattern, but then came down in a C-Wave that is undercutting $1500 Monday night – we could see a retracement bounce start on Tuesday. The USD may have given us an EW a-b-c bounce into 98.43 early Monday that could lead us into the next leg down.
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Big Picture on Stocks (UPDATED) – Chinese restraint on Hong Kong and playing nice on trade talks allowed the SPX to rally into Friday’s NFP jobs report. We could see a consolidation early this week into the 9/13-9/14 Full Moon Timing Window before a push to all-time highs above 3027 into the second half of September.
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Big Picture on PMs (UPDATED) – Gold tested $1510.7 Friday to potentially finish a “running B-Wave” correction from 8/25 – a break below $1510, however, would argue for a larger move down.
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Stocks – We expect the SPX to consolidate early this week to 2950 or so before rallying above 3027 by next week. With China playing nice on Hong Kong and US trade talks, the path of least resistance may take us to SPX 3100 by the end of September.
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Gold – Gold undercut $1510.7 Monday and went below $1500 Monday night – we could see a retracement bounce start on Tuesday.
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Silver – Silver is breaking below $18 early Tuesday but should catch a bounce soon.
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Bonds – Bond yields are backing up and giving bank stocks a boost.
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Crude Oil – Crude oil broke above $58 and is making multi-week highs – beaten down oil service stocks like SLB got a bounce today.
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Dollar Index – The USD gave us a corrective bounce into 99.43 early Monday and may be coiling for a move down.
TURNING POINT DAY
The turn window for this week is 9/13-9/14, the Full Moon Timing Window.
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