woensdag 14 juni 2017

Wednesday Market Observations

*) We are close to our SPX 2430 - 2450 target for June and are expecting a 5-10% correction in the SPX from June to July/aug, perhaps after the 6/14 Fed rate hike decision.
# The DJIA, Russell 2000 and NYSE all made new all-time highs Tuesday despite the contentious testimony of AG Jeff Sessions during the markets last hour of trading. The SPX opened higher on Tuesday and appears to be on a path to test or exceed the SPX 2446.2 all-time highs on Wednesday. We favor higher SPX highs today but are concerned for another pullback starting soon. We do expect a lot of volatility after the Fed rate hike decision on Wednesday.
# Gold declined into the 34-day step out from its low on 5/9 and made a low early Tuesday. We are looking to buy any post-Fed rate hike decline on Wednesday. We need a weekly close above $1308 for a true breakout. Another test of the $1300 level and failure could lead us to test the May 9 low at $1214.
# Silver also made a low early Tuesday in the 34-day Fibonacci step out window from the 5/9 low. This is short-term bullish. We plan to buy any post-Fed rate hike weakness.
# Looking at Crude oil, the XLE gave us an EW 5-wave rally from last week's low on the hourly and is consolidating sideways.
# Bonds have been resilient in recent weeks; watch the FED rate-hike decision.
# The Dollar Index finished 3-wave corrective bounce from Thursday into noon Friday (Wave A?). The USD made a 3-wave pullback into Tuesday (a wave B on the hourly?) and looks ready for a post-Fed rate hike bounce higher (Wave C?). How the USD trades after the Fed rate hike decision is key for several markets....