vrijdag 4 augustus 2017

Friday Market Observations

# The stock indices are trying to hold up into the 8/21 solar eclipse after which we expect market weakness from August through October ( a sideways Wave 4?). An explosive 5th wave higher should be underway by late October and take the QQQ to 10,000 by the fall of 2018.
# Another day and another record high in the DJIA, with bearish divergence in play between the DJIA and the SPX/NDX for the last week. We still could hold up into the 8/7 lunar eclipse and the 8/21 solar eclipse. It will take a move under SPX 2460 to confirm a short-term high on 7/27 or a close above 2479 pivot resistance to confirm a low and a quick move to 2500. We are focused however (on a break of SPX 2460) on our potential gap-fill targets at SPX 2430-2440 and QQQ 139-140. Our projected time window for the high of the year is 8/20-8/21 which happens to overlap the highly anticipated solar eclipse.
# Gold and silver are correcting into the 8/7 Full Moon/lunar eclipse. The Comex gold and silver COTs are arguing that the PMs made a major low on 7/10. We still expect a big rally into October and beyond. Gold may be pulling back into 8/7 Full Moon/lunar eclipse.
# The COTs are screaming that silver is a major buy here on dips as we approach the 8/7 Full Moon. We are close to the start of a 3rd of a 3rd wave higher off the February 2016 low.
# We think that crude oil made a major low at $42. The OIH may have made an important low on 7/24. However, the XLE looked weak yesterday.
# Bonds are bouncing hard into Friday.
# The USD is in an entrenched downtrend, but we are in the important 92-94 multi-year support band, so we may see a sizable bounce develop here. Our bias is that we have started a major bear market and the uptrend in commodities since May should have legs. The $DXY is giving us an oversold bounce from its entrenched downtrend; a close below 92 could start a rout....