All Star Market Timing

Folks,

Market Observations for the Week: The SPX did reach a short-term peak late Monday and we started a small correction. The SPX is pulling back into the Fed minutes on Wednesday – we’ll see if the Fed has any surprises left for the market. The grip of FOMO (fear of missing out) and irrational exuberance is still strong, however, and we are more inclined to play long setups until the SPX gives us 5-waves down on the hourly chart. Crude oil started a correction that could test $36 this week. 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 and gave us a correction before moving higher – Friday’s Full Moon/lunar eclipse could have marked a significant low.

6/09/20 (Commentary for Tuesday)
The SPX gave us a mild pullback today and the financials started their correction early Monday. We believe that new all-time highs above SPX 3400 will be seen later this month, but in the short-term, we are getting an EW a-b-c correction on the 5-min chart that could end tomorrow. 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 and feel that even the re-opened US economy will start to fail by late summer. 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 and started an EW a-b-c correction that could test $36. Gold and silver may both have seen important lows on Friday’s Full Moon and we may see a reversal higher on Wednesday – especially after the Fed minutes. The USD may have started an important “bear phase” – breaking under 96 could confirm this.

Big Picture on Stocks (UPDATED) – The SPX price action from the high of January 2018 to the low of March 2020 was 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 will make new highs above 3400 by early summer. We have started a liquidity-driven blow off in the SPX that is being fueled by FOMO and irrational exuberance. Do not fight the Fed’s Bazooka here and our bias is to buy bank and energy stocks on dips until the SPX gives us an 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 – this is bullish.

• Stocks – The SPX started a mild correction on Tuesday and we may finish an EW a-b-c pullback as soon as tomorrow. We will continue to stalk long setups on bank and energy stocks until we get a reversal signal.
  
• Gold – Gold made a low at $1671 on Friday’s Full Moon/lunar eclipse – gold rallied on Tuesday and is giving us a shallow sideways correction overnight – we could see a nice move higher on Fed Wednesday. The CPI report pre-market Wednesday could surprise.
  
• Silver – Silver may have finished a 4^th wave correction on Friday – the silver stocks(SIL) are trying to lead the metal higher which is bullish.
  
• Bonds – Bonds rallied Tuesday but gave some back on a bad Treasury auction into the close.
  
• Crude Oil –
  Crude oil tested $41 Sunday night and started a correction that could test $36 by Friday.
  
• Dollar Index – The USD continues to sub-divide down impulsively – we may have started an intermediate move down that could benefit the PM sector.
  

   

TURNING POINT DAY

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