dinsdag 13 juni 2017

Tuesday Market Observations

*) Cycles become even more extended (right translated). How long can this continue? Best guess is not much longer. We are expecting a top soon. We are seeing cracks in our market "wall of worry",this is bearish. A June-July correction is still our expectation. The turn window for this week is 6/14, the FOMC rate increase announcement....

# We got early weakness on Monday, and we rallied into the close. However, the SPX rally from late Friday looks corrective. We favored another run higher into the 6/14 rate hike decision but that rally looks corrective at this point. We are close to our SPX 2430 - 2450 target for June and are expecting a 5-10% correction (Flash Crash??) in the SPX from June to July (perhaps after the June rate hike this week).
# The most striking move of the day for us was the second leg up in the oil stocks which were one of the beneficiaries of the rotation out of technology. The XLE now appears 5-waves up in the hourly from lows last week.
# Gold declined into the 34-day step out from its low on 5/9. We are looking for a big reversal up by 6/14, after the Fed rate hike decision. The big rally in the GDX/GLD ratio on 6/6 is a bullish signal for the PM complex. A weekly close above $1308 for gold will be very bullish. Bearish newsletter sentiment is contrarian bullish, as we approach the anticipated 6/14 rate hike.
# Silver also took out its Full Moon low, but we're looking for a big reversal higher by 6/14.
# Bonds rallied in 5-waves on the hourly chart into 6/6 and then may have finished an EW a-b-c correction into early Friday.
# The USD did bounce Thursday from an oversold technical condition. We may have finished an EW a-b-c correction around noon on Friday....