Folks,
Market Observations for the Week: The SPX rallied on Monday and finished an EW 5-wave pattern that started late Thursday and ended with a test of 4300 late Monday. Today, the TRIN-5 gave us its 4th consecutive SELL SIGNAL and the Option Premium Ratio also gave us a SELL SIGNAL with a 1.01, 0.92, 0.80, 0.50 pattern that featured three consecutive declines. The SPY tagged its 200-dma from below into the close. We are as overbought as the 3/29 high and we are still looking for a quick retrace back to SPX 4200 by Wednesday with its retail sales report and the FOMC minutes. Bitcoin rallied to 25270 overnight Sunday and telegraphed a strong open in the SPX early Monday. Crude oil fell to lower lows at $86.82 on news of Chinese rate cuts and fears of a slowing global economy which boosted bonds. Gold gave us a minimal C-Wave down which tested $1788.6. The USD gave us a 3-wave bounce into Monday that reached 106.57.
8/15/22 (Commentary for Monday) With just brief pullbacks, the SPX continued to make higher highs into the 8/10-8/15 Full Moon Timing Window and today tested 4300 near the close. However, with four consecutive TRIN-5 SELL SIGNALS, the SPX is as overbought as anytime in 2022 and we also got an Option Premium Ratio sell signal. We are looking for a pullback into the FOMC minutes on Wednesday. Our bias is for a quick pullback to test 4200 support by Wednesday before starting a rally to test 4300+ by the 8/27 New Moon. The astro-finance has been extremely intense so far in August and the Uranus aspects have served to accelerate global markets higher. To us, the blow off last week into the 8/10-8/15 Full Moon Timing Window (which usually statistically correlates as a low) resembles the markets of late 2021 and suggests more rally into the 8/27 New Moon Timing Window. The fact that Bitcoin rallied to test 25,270 overnight Sunday was suggestive of higher prices in the NDX early Monday. This is not the time for stock bulls to get greedy in our opinion as long traders have already had a big run, however, we must concede that higher targets of 4300+ are still possible going into the 8/27 New Moon and that at least a test of the SPX 200-dma at 4328.90 is possible. After hearing the news of Chinese rate cuts, crude oil undercut its $87 low and tagged $86.82. Gold gave us a minimal C-Wave down that touched $1788.6. The USD gave us a 3-wave bounce into 106.60 on Monday. Our current holdings are ~80% cash and ~20% in physical gold/silver/platinum.
Big Picture on Stocks (UPDATED) – The SPX accelerated into the 8/10-8/15 Full Moon Timing Window and made highs for the rally at 4301 near Monday’s close. After a quick pullback into Wednesday that finds support at 4200, we could see the SPX rally to 4300+ into the 8/27 New Moon. 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 rallied impulsively from $1678 to $1824 on the 8/10 Full Moon but may have given us a minimal C-Wave down to test $1788.6 today. Gold tends to pull back into the Wednesday FOMC minutes.
- Stocks – The SPX powered higher to test 4300 Monday, but the SPX is very overbought here. We are looking for a quick pullback into the Wednesday FOMC minutes.
- Gold – Gold rallied impulsively from $1678 to $1824 before a sideways correction into Friday – we may have gotten a minimal C-wave down to test $1788.6 early today.
- Silver – After testing $20.85 late Friday, highs for the week, silver came down to test $20 on Monday.
- Bonds – Bonds may be close to finishing an EW a-b-c correction.
- Crude Oil – Crude oil broke to lower lows today as the as the weak economic news from China shocked the market.
- Dollar Index – The USD rebounded in just 3-waves to 106.06 on Monday.
TURNING POINT DAY
The turn window for this week is 8/15 which is the last day of the Full Moon Timing Window.
Leave a Reply