maandag 3 juli 2017

Monday Market Observations

# The FANG stocks for hit hard on the close Friday and the gold stocks were bought hard at the close. Is this a harbinger for Monday's holiday trade? There was intense rotation out of technology stocks last week and into the banks which makes sense as global 10-yr rates have backed up. We also think that crude oil made a major low at $42 horizontal support. We will look for a run up into our August 20 "high for the year" time target in the SPX.
# Tech stocks closed weak on Friday and our target on the QQQ is 134.50 (the 100-day MA), could see that this next week. On Friday, we may have just seen a Wave 2 of 3 of C bounce for the QQQ. Even if this is just a mild consolidation, we are still vulnerable to a normal bull market correction of 10% going into mid-July. After the June-July correction (a sideways 4th wave?) runs its course, we're expecting a high for the year around August 20 (+/-3 trading days) with a minimum target of SPX 2480.
# Gold undercut the 6/26 low and we now expect a test of the $1214 this week. The GDX now looks like it needs an undercut low of 21.80 on Monday.
# Silver is still showing relative strength to gold which is bullish.
# The USD is bouncing (looks corrective) into Sunday evening; this is pressuring gold....