All Star Market Timing

Folks,

Market Observations for the Week: The SPX did make a higher high than Friday to 4186.62 but the Option Premium Ratio SELL SIGNAL from back-to-back readings of 0.87 last Thursday kicked in and took the market down. We are also in the orb of the 8/9 3-star critical reversal day, so we suspect that at least a short-term high is in. The SPX could hold up into the CPI report early Wednesday which should set the tone for the week. Crude oil gave us a weak sideways bounce to $90.93 but the trend still looks down. Gold gave us just a 3-wave bounce to $1806 on Monday and appears to be rolling over in a Wave C.  The USD is overlapping its Person’s Pivot overnight at 106.4.

8/08/22 (Commentary for Monday) The IWM led the SPY up this morning and a short-term high may be in place until the market gets the CPI number early Wednesday. The SPX tested the 4188-4200 resistance area before turning down and its possible that the market got wind of an early leak of the CPI report. However, our Option Premium Ratio gave us a SELL SIGNAL on Thursday and the SPX held up into the orb of the 3-star critical reversal day on 8/9, so bulls should not have been greedy here. Bonds may be tracing out a Running B-Wave continuation pattern to the downside and may be sniffing out a hotter-than-expected CPI report Wednesday. Crude oil gave us a weak EW a-b-c bounce that tested $91 Monday but still looks bearish for more downside below $87. Gold finished an EW 5-waves up off the $1678 low to $1812 last week and may have started a 3-wave correction. The USD is holding around its Person’s pivot at 106.35 overnight Monday.  Our current holdings are ~80% cash and ~20% in physical gold/silver/platinum.

Big Picture on Stocks (UPDATED) – The SPX took out Friday’s high and tested 4188 before rolling over – a worse than expected CPI inflation report may have been leaked early. 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 gave us an EW 5-waves higher from $1678 to $1812 and started a pullback from late Thursday – just a 3-wave correction would be short-term bullish.  

• Stocks – Our Option Premium Ratio gave us back-to-back values of .87 on Thursday which is a SELL SIGNAL for the SPX. Also, the SPX held up into the orb of a 3-star critical reversal day on 8/9. We used early strength on Monday to exit long positions.
• Gold – Gold started a correction from the $1812 high late Thursday – just a 3-wave correction from Thursday’s high would be bullish for more gains.
• Silver – Silver spiked to $20.74 today and made a multi-week high.  
• Bonds – Bonds may be giving us a Running B-Wave correction to the downside which is a sign of weakness.
• Crude Oil – Crude oil bounced to test $91 but the pattern looks weak for an undercut of $87.
• Dollar Index – The USD spiked to 106.93 after the NFP jobs report on Friday – a weekly high.

TURNING POINT DAY

The turn window for this week is 8/8-8/9.