woensdag 2 augustus 2017

Wednesday Market Observations

# The SPX gave us another gap-up open on Tuesday (pivot resistance at SPX 2479) that got sold off and the DJIA made another record close. Bearish divergence has set up between the DJIA and the SPX/NDX. It will take a move under SPX 2460 to confirm a short-term high on 7/27, and we are focused on our potential gap-fill targets at SPX 2430-2440 and QQQ 139-140. Our three consecutive sell signals in the CBOE equity put/call ratio last week kicked in on 7/27. The corrective bounce from Thursday into Tuesday's close (B-wave) argues for more down on Wednesday / Thursday (C-wave), but that depends on how AAPL opens early today. Still our projected time window for the high of the year is 8/20-8/21, which happens to overlap the highly anticipated solar eclipse. We expect market weakness from mid August through October.
# Gold and silver are sub-dividing higher bullishly. The Comex gold and silver COTs are arguing that the PMs made a major low on 7/10 Full Moon Timing window. We expect a big rally into October and beyond. Gold may test $1300 this week.
# Silver is a major buy here on dips. We continue to scale in on leap calls on SLV on any dips. We are close to the start of a 3rd of a 3rd wave higher off the February 2016 low.
# We still think that crude oil made a major low at $42. The OIH may have made an important low on 7/24. We still think that oil stocks could make a big run into our yearly time target at 8/20.
# Bonds may have finished an EW a-b-c bounce on Tuesday.
# 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....