Market Analysis - Tuesday, July 7

SPX futures may have begun pulling away from yesterday’s (final) probe at he upper Triangle trendline. The correction may last 1-2 weeks as the SPX immediately targets the lower triangle trendline at 7350.00. A tail may develop, sending the SPX beneath the trendline as a “tail” develops. A target for the tail may be 7200.00, or possibly lower. This may feel like a bear market for those investing with leverage, but it is not.

The premarket VIX is hovering near yesterday’s Master Cycle low. The Triangle formation must be completed at or beneath point (E). As a result, another zig-zag may be needed to complete the task, taking more time.  Reaching the terminus of point (E) may be agonizingly slow. Meanwhile, VIX may rise as correlations break down. The bid to keep volatility low may break down.

The US 10-year Bond Yield appears stalled at Intermediate resistance near 45.00. The Master Cycle may have completed at 45.05 on July 2. However, a clear reversal has not yet been made.  Should it go higher, the target may be the Cycle Top resistance at 45.77. However, a decline beneath the 52-day Moving Average at 44.57 may instigate the next move lower.

The USD index is hovering near the Head & Shoulders neckline at 100.85 as it works off its overbought condition. Once accomplished, this may allow the USD to resume its uptrend above the neckline for another month.

Bitcoin may have completed its corrective rally to 64657.00 yesterday with a resumption of the downtrend on the docket. The Cycles Model shows bitcoin having a potential to decline to early August. Round number support lies at 50000.00 while another support level lies near 45000.00.

Crude oil reached a new high at 69.74 this morning, putting last week’s Master Cycle low behind it. The Cycles Model suggests a rally to mid-August. Cycle strength may appear this weekend and last through July.

Gold futures are consolidating beneath their peak at 4203.00. The  bounce may be complete and the decline must continue for another week or so. The immediate support lies at the Cycle Bottom at 3782.58. However, there may be a strong pull to the trading channel trendline at 3600.00.