Folks,
Market Observations for the Week: The SPX made highs for the week today at 4786 as it grinds higher for a retest of the 1/4/2022 ATH at 4818. We are now looking for a test of the ATH this week or early next. After last week's SPX low at 4698, we are looking for the SPX and gold to rally into 1/8-1/11. The SPX could reach a new all-time high at 5100 and gold could test $2188. The NYSE composite has a two-year cycle that is due by mid-January before a steep correction into March. The 10-yr US rate does not seem to want to reverse higher and continued to grind lower today to 3.785%. The VIX spiked up to test 13.04 near the open Wednesday before reversing down to test 12.4 – we are looking for a test of the lows at 11.85 by early January. We still have shares of SPXS, SQQQ and TZA – we're hanging on to these short shares for potential selling in mid-January. We prefer to remain 75% in cash that is paying us a risk-free 5% while using small amounts of funds to trade good setups. Our current positions are 5% natural gas (UNG), 75% cash and 20% physical gold, silver and platinum.
12/27/23 (Commentary for Wednesday) From the 12/20 SPX high at 4778, the SPX traced out a triangle from 12/20 to 12/22 at the Mercury retrograde midpoint and then reversed higher today to test 4786 on Wednesday. We are now looking for a test of the SPX ATH at 4818 by Friday, 12/29 or early next week. Farther out, we could see a test of SPX 5100 and gold $2188 by 1/8-1/11. The US 10-yr rate remained in its down trend into Wednesday's close on the back of a very well bid US 10-yr note auction on Tuesday that drove the 10-yr US rate down to 3.785%. We're looking to sell our SPXS, SQQQ, and TZA bearish shares on a retest of SPX 4300 in the second half of January. Crude oil made a low at $73.16 early on Tuesday's Full Moon and then reversed up to test $76.22 Tuesday evening before a decline to $73.83 Wednesday evening.
Big Picture on Stocks (UPDATED) The trend of the 10-yr US rate remained down into Wednesday's close – we need to see a reversal up on the TNX to get a longer SPX correction in time.
Big Picture on PMs (UPDATED) Gold made a low at $2065 early on Tuesday's Full Moon and then reversed higher to test $2095 by Wednesday evening- we are now looking for higher highs by 12/29.
Stocks – The SPX tagged 4786 today and made highs for the week. We are now looking for a test of the SPX ATH of 4818 by 12/29.
Gold – Gold reversed up from its early low at $2065 on Tuesday's Full Moon and then rallied up to test $2095 on Wednesday evening.
Silver – We expect silver to rally above $24.85 by 12/29.
Bonds – After a well-bid 10-yr US note auction on Tuesday, bonds rallied up to test 125'30 Wednesday evening.
Crude Oil - Crude oil spiked higher to $76.22 on Tuesday's Full Moon before pulling back to $73.83 on Wednesday evening.
Dollar Index – The USD broke important support at 101.17 and is testing 100.77 Wednesday night – this is holding gold and silver up.
TURNING POINT DAY
The turn window for this week is the 12/26-12/27 Full Moon Timing Window.
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