Midday Update 2023-08-21
SPX gave back the overnight gains in the morning but firmed up near noon
S&P 500 pushed for the day session hourly 20 EMA in the morning but was faded which resulted in a fill of the gap from last Friday. I lean towards a retest of the EMA or a bit higher in an [A] wave. Can things go wrong? Absolutely. Bears hope for a consolidation and a new low under that of last Friday. My overall thesis is the bear boat is a little overcrowded and want that to thin out this week before the next major leg down.
My expectation of a small bond bounce has been thwarted as they drop under 118^20 this morning. In the very short term, ZB may try for a tap of 117^08 but getting extended. Yes, in the weekly post I mentioned that the next major target is lower, but I think there can be a minor bounce before thrusting down for the final wave v target.
CL has fallen away from resistance at 81.60 but I’m reluctant to call that the wave II high, more likely in my opinion just the first leg of wave II. Next support at 80.00 and 79.30.