SPX futures eased down to 7753.50 this morning, possibly in a test of Intermediate support at 7691.14. Short-term strength has been spent, and a brief dip may be in order. The Cycles Model suggests the uptrend may revive next week and continue to the week of October 12. The Cycle Top at 7680.00 and the trendline near 8000.00 may be the possible targets.
ZeroHedge reports, “US equity futures are down modestly, but at session lows, as oil reverses earlier losses (crude was on pace for a sixth straight day of declines, its longest losing run in a year) sending Brent back over $100 and pushing 10Y yields back to 4.99%.”
The premarket VIX dipped to 14.12, then bounced. It is currently hovering near the low. The Cycles Model suggests the “tail” on the Triangle formation may go lower. The trading channel trendline points to a target near 12.50.
The US Dollar Index rose to 100.93 this morning as it approached the Cycle Top and Neckline at 101.68. The Cycles model suggests calm to the end of the month, with Trading Strength picking up in early October.
The US 10-year Bond Yield pressed against the lip of the “possible” Cup with Handle formation at 50.00. I am being cautious because the formation is 6.5 years long thus far. I have been successful spotting 2 and 3 year formations, but this one gives me pause. It is likely to offer a 2-year forecast, due to its size. A possible 6-month target may be near 64.00 in the TNX, or 6.4%. A word of caution. Bond shorts are loading up, encouraged by the rally in yields. But often the market “cleans house” before a big move. The Cycles Model allows a possible break beneath the Cycle Top at 50.00. A strong decline to the 52-day Moving Average by the end of the month may be indicated.
ZeroHedge reports, “Ahead of today’s auction, with yields sliding early in the day tracking the drop in oil tick-for-tick, some speculated that participants in today’s sale of $69BN in 2 year notes would need a modest concession to show enthusiasm for the auction. And even though yields did push wider until the 1pm stop, it appears it was not enough and the auction was notably on the weak side.”
Crude oil found support at Intermediate support at 89.39 this morning, resuming its uptrend after a strong shake-out. Weak investors may not be able to stand the wide swings that commodities produce. However, the uptrend is intact and may resume its course. The Cycles Model shows increasing strength by the weekend and a possible panic rally to mid-October.
Gold tested the 52-day Moving Average at 42.89 this morning. The support held, leaving gold the ability to go higher. A burst of trending strength may come as early as tomorrow which may test the mid-Cycle resistance at 4551.25. Should it clear that resistance, gold may develop the ability to rise to the Cycle Top at 5240.90 by mid-October.
ZeroHedge observes, “China’s real gold purchases appear to be roughly twice the amount disclosed through official channels, according to Goldman Sachs’ latest estimate.”
Comments
Log in or sign up to join the conversation.