maandag 7 augustus 2017

Monday 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 Wave 4). An explosive 5th wave higher should be underway by late October and could take us to highs for the year by December.
# A strong NFP jobs number helped give us another record high in the DJIA on Friday, so there's still bearish divergence between the DJIA and the SPX/NDX for the last week. The SPX, however, has been tracing out a contracting triangle since 7/27 and it looks ready to break higher or lower. 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. The markets could hold up into the 8/21 solar eclipse, but we are focused (on a break of SPX 2460) on our potential gap-fill targets at SPX 2430-2440 and QQQ 139-140. Our projected time window high for the summer is 8/20-8/2,1 which happens to overlap the highly anticipated solar eclipse...

# Gold and silver are correcting Pulling Back 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, so we must be on our toes. we're watching the GDX/GLD ratio closely for a bullish break out signal, which is the start of a 3rd wave higher in gold (and silver).
# The COTs are screaming that silver is a major buy here as we decline into 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.
# Bonds fell hard after the strong NFL jobs report.
# The USD is giving us an oversold bounce in a bear market that has more to go. 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. We could see a reversal back down on Monday....