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7/11/08 - Equities, Volatile Market tough for many
Last week I expected lows on Monday and Wednesday, and expected a good rally into the end of the week, but instead Friday went lower before a volatile rebound. This leaves us in a tough position to have a confident forecast into the Cardinal Full Moon of July 18th. This Moon should be volatile and could be a high as previously thought, or a low as made possible by the weak close on Friday. There are many signs of a possible low again this week, but the Full Moon next Friday makes it dangerous, and it is best to keep an eye on my Live Charts during the week for any updates. Charts courtesy of StockCharts.com SPX reaches 4 year cycle low target
The SPX dropped within 6 points of the 4 year cycle low of 1219 which is a likely target for this wave down. We can see that the white Tick line has continued to rise, and the blue Highs/Lows ratio line is low enough to start a rally, but the red VIX line is not high enough to be very confident it will start now. Charts courtesy of StockCharts.com McClellan oscillators still climbing
Both McClellan oscillator continue to climb from levels where good lows were made, . Charts courtesy of StockCharts.com Stocks above 50 Day MA turning up from very oversold
The percentage of stocks above their 50 day moving average continued to climb slightly, suggesting that more stocks are recovering. Charts courtesy of StockCharts.com Stocks above 200 Day MA still climbing
The percentage of stocks above their 200 day moving average continued to climb slightly, warning that fewer stocks are breaking down. Charts courtesy of StockCharts.com VIX reached short-term targets
The VIX has reached the Fibonacci and parallel channel target near 30, and may turn down into the Full Moon of July 18th or make a high July 18th after a pullback this week. Charts courtesy of StockCharts.com The SPX to VIX ratio has the July 18th Full Moon as a low
The 60 trading day cycle visible in the SPX to VIX ratio chart below is suggesting the Full Moon of July 18th might be a low. If we rally early this week, we may pullback or even make much lower lows by the Full Moon of July 18th, since it is also a Cardinal Moon capable of generating vicious sell-offs. Charts courtesy of StockCharts.com Bonds, Still near both 50/200 day MA
As suspected last week, Bonds made a false break above their 50/200 day moving averages only to fall back sharply, but Stocks failed to rally as Bonds pulled back. Charts courtesy of StockCharts.com The 13 month PI cycle is positive until Election
Since the 13 month PI cycle is headed higher into the November election, any pullback in Bonds is unlikely to last more than a week or two at the most, before they start rising again. Charts courtesy of StockCharts.com Currencies, US Dollar fails to rally
The US Dollar failed to continue its rally, despite its positive cycle into July 21st and the sharp rise in Rates Friday. While the USD may not start to decline seriously until we are past the July 21st cycle high, it looks like we could see the final 4.3 year cycle low capitulation occur in early August. Charts courtesy of StockCharts.com The 4.3 year PI cycle Capitulation
Since the US Dollar has made little gains in the 3 months since the March low, it is unlikely we have seen the 4.3 year cycle low yet. This behavior is not surprising, since recent lows were 17 and 68 days late, and that takes us to late August as a possible capitulation low. Charts courtesy of StockCharts.com Commodities,
Charts courtesy of StockCharts.com Gold rallying in clear 5 wave fashion
Gold rallied again establishing a clear 5 wave pattern and will likely pullback to 900 once it completes. This pullback could occur near July 21st coincident with a final USD bounce, before the 4.3 year cycle low capitulation. However this should be a buying opportunity with a powerful rally into the Fall as forecasted by the Silver cycles below. Charts courtesy of StockCharts.com Silver has July 15th as a low
The 11 month cycle shows up well in Silver, and the last two cycle lows of Sep 15,06 and Aug 15, 07 saw sharp declines. Beware of a possible buying opportunity near the Cardinal Full Moon of July 18th, just before the start of the next rally into the Fall. Charts courtesy of StockCharts.com |
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