There was another minor push lower in $SPX this morning but regained its footing around 10:30. The action thus far today is consistent with the theme for the week, lower early to mid-week followed by a rise into Thursday afternoon or Friday morning at which point the decision will be made as to whether the S&P 500 can push to a new high early next week or instead sets a lower high. That SPX dropped under 4508 this morning adds some weight to the bearish alternate form labeled on the following chart in maroon. First goal for short-term bulls today is to push for the gap fill around 4513 though I think higher by the end of the day is possible, say 4526 or 4540. The tech earnings after the bell and NFP tomorrow morning will determine if we are looking at an eventual new high or a lower high. I’m pretty ambivalent between the two.
The drop in bonds is consistent with my bigger picture view that we should see an eventual new low in bonds under that of the low of last year, but the short-term squiggles I’m less certain about. I think it best to allow for a bounce attempt in this area though the bounce need not be particularly deep, 122^31 would be fine. First step in triggering the bounce is a recovery of 121^01.
While we had a nice drop in CL yesterday, it held at the 78.65 support leaving open the possibility that this was just a correction in the advance up from the mid-July low and here comes news of production cuts. I think it likely now to see a marginal new swing high around 82.60 or 83.65 but am undeterred in my opinion that the crude advance is late in its development and subject to a pretty decent retrace at a minimum before long.