All Star Market Timing

Folks,

Market Observations for the Week: The SPX and NDX continued their blow off into Monday and we saw the lowest CBOE equity put/call ratio (.37) since 2011 and the 10-dma of this ratio < .50 which is a major sell signal. We may have seen a short-term SPX high Monday, but the market is in the grip of FOMO (fear of missing out) and irrational exuberance and we are more inclined to play long setups until the SPX gives us 5-waves down on the hourly chart. Crude oil ran higher into late Sunday and tested $41 – we corrected into Monday. The Fed wants to see the SPX back at the February highs and it can do it with its liquidity bazooka – DO NOT FIGHT THE FED. Gold rallied in 5-waves up from the Friday low into late Monday – the 55-day Fibonacci step out from the 4/14 high looks like a low.

6/08/20 (Commentary for Monday) Deeply oversold put/call ratios and a deeply overbought TRIN-5 (3.04) argue that some kind of short-term high in the SPX was made today. We believe that new all-time highs above SPX 3400 will be seen later this month, but in the short-term, we are looking for an EW a-b-c correction on the 5-min chart. Our preferred EW count is that the 3/23 low was the end of a large Running B-Wave correction that should lead to new all-time highs by summer and we have seen that already in the NDX. The entire SPX price action from the 3/23 low can be viewed as an impulse wave that continues to sub-divide higher in a 5th wave of a bull market phase that started on the March lows – our bias is that this is the final blow off in the secular bull market that started in March 2009. We do NOT believe in fighting the Fed Bazooka here and plan to participate in the rally by buying bank stocks and energy stocks on dips. The Fed's determination to reflate the stock market trumped the May seasonal weakness in the Presidential cycle here and that impressed us. Crude oil tested $41 late Sunday before correcting into Monday. Gold may have seen an important low at $1671 on Friday's Full Moon and the 5-waves higher into Monday's close is encouraging. The USD has found some support in the 96.46-96.6 band but looks to break down again soon.

• Big Picture on Stocks (UPDATED) – The SPX price action from the high of January 2018 to the low of March 2020 may have been a large Running B-Wave correction in Elliott Wave parlance. The rally off the 3/23 low looks like an impulse leg higher in a bull market that could make new highs above 3400. We have started a liquidity-driven blow off in the SPX that has been seized by FOMO and irrational exuberance. Do not fight the Fed's Bazooka here and our bias is to buy BAC and WFC here on dips until the SPX gives us a 5-wave down on the hourly chart reversal signal.
• Big Picture on PMs (UPDATED) – Silver gave us 5-waves up on the daily chart and started a correction on 6/1. Gold and silver pulled back into the Full Moon/lunar eclipse on Friday and started a 5-wave rally on the hourly chart into Monday.

• Stocks – The SPX blew off again into Monday – we may have seen a short-term top today, but we will continue to take long setups until we get a reversal signal.
• Gold – Gold may have made a low on Friday at $1671 and gave us 5-waves up on the hourly into Monday's close – we are looking to buy dips on Tuesday.
• Silver – Silver may have finished a 4^th wave correction on Friday – silver stocks are trying to lead the metal higher which is bullish.
• Bonds – Bonds tested 171 early Friday and bounced in a 4^th wave into Monday – we are looking for an undercut low later this week.
• Crude Oil – Crude oil tested $41 Sunday night and started a correction into Monday.
• Dollar Index – The USD continues to sub-divide down impulsively, but we are holding up around 96.7.

TURNING POINT DAY

The turn windows for this week is 6/8 and 6/12.