All Star Market Timing

Folks,

Market Observations for the Week: The SPX is just tracing out a sideways correction into Wednesday which is short-term bullish. A run up in the SPX to test 4200 looks likely this week. The SPX has a seasonal tendency to decline into Friday’s NFP jobs report. The FANG stocks are holding up well here which is a bullish indication. Bitcoin is testing highs for the week at 23681 which is another bullish indication. Crude oil is testing $96.55 early Wednesday which is the high for the week – our bias is still down for a test of $90 in the near term. Gold tested $1805 early Tuesday and started a correction back below $1800 as it approaches the NFP jobs report early Friday. The USD just gave a 3-wave correction down to test 105 and then a bounce early Wednesday.

8/02/22 (Commentary for Tuesday) The SPX traced out a sideways corrective pattern on Tuesday which is a sign of strength. The 6/17 low at SPX 3636 was an intermediate cycle low and rallying past the 34-day Fibonacci step out on 7/22 was a Sign of Strength for more rally extension. The sideways corrective action in the SPX this week argues for a test of SPX 4300. Bitcoin made highs for the week at 23701 and may be tracing out a bullish “cup and handle” pattern on the short-term chart – Bitcoin follows the lunar cycle pretty tightly and made a short-term high last week on the New Moon. Crude oil still looks weak to us, so our bias is for a spike down into Wednesday. Gold tested $1805 early Tuesday and then started a correction below $1800 in advance of Friday’s NFP jobs report. The USD tested the 105 level and is bouncing early Wednesday. Our current holdings are ~80% cash and ~20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) – The SPX gave us a short-term peak on Monday at 4145 and could correct into Thursday before a run higher to 4300. Longer term, the SPX could give us a 20%-50% correction by spring 2023 as the 20-yr cycle low bottoms and the US economy slows to a recession. We favor a high percentage of cash for capital preservation.

Big Picture on PMs (UPDATED) – Gold tested $1805 early Tuesday but has a seasonal tendency to decline into Friday’s NFP jobs report.  

• Stocks – With a rising bond market, the FANG stocks are holding up the SPX here as the market waits for the NFP jobs report early Friday. Nancy Pelosi’s visit to Taiwan this week is a wild card for the market but global markets have held up well so far.
• Gold – Gold tested $1805 early Tuesday before starting a correction into the NFP jobs report.
• Silver – Silver double-tested $20.50 early Tuesday and stated its pre-NFP jobs report correction.
• Bonds – Bonds declined in an EW 5-waves on the hourly chart which is a Sell Signal – bonds may be anticipating a stronger than expected jobs report on Friday and more Fed rate hikes.
• Crude Oil – Crude oil is trading weakly and still is targeting $90 in our view.
• Dollar Index – The USD pulled back in just 3-waves to 105 Tuesday and started a bounce to test its R1 resistance pivot at 106.71.

TURNING POINT DAY

The turn window for this week is 8/1-8/2.