Market Analysis - Friday, August 21

SPX futures bounced this morning after making a 35% retracement from the high. However, it has remained beneath resistance at 7700.00, which may allow a dip lower. The chances of a deeper low may run out this morning, so we may not have long to wait.  For example, a possible 50% retracement lies near 7560.00. Investors are “all in” as mutual fund cash is at at an all-time low. The Treasury’s ill-executed buyback scheme may need a repeat to jolt the markets higher. The Cycles Model does not show Trending Strength returning until the end of the month.

VIX is xconsolidating near the middle of its recent trading range above the lower Triangle trendline. A further decline in the SPX may push the VIX higher, as it may have the energy to rise to the Ending Diagonall trendline at 20.00.

Bitcoin rose to a morning high at 78410.00 this morning, beneath the Cycle Top resistaance at 81033.00. On Tuesday it offered a buy signal, accompanied by trending strength, and off it went, as the shorts frantically covered. The Cycles Model suggests a pullback may be in order, possibly to the mid-Cycle support at 68961.00, before a month-end burst of energy pushes it higher. The next resistance level above the Cycle Top lies at the 38.2% retracement level at 84250.00. The cycles Model sugests the trend may continue (with corrections) until the end of September.

Crude oil is consolidating above trendline support as it consolidates between moves. The next probe higher may occur next week, with strength, as it extends its rally to mid-October.