The Day Ahead: 2022-12-05
The 'higher for longer' narrative made a comeback today sending equities lower
Bonds
ZB fell away from 129^21 today but has yet to break under the first support at 128^25 which is needed for first confirmation. I think there is a good chance to test 127^08 or 127^02.
Crude Oil
Nice move down in oil today. I’m treating the price action between November 21st and December 1st as a wave [IV] and the drop today early in a wave [V] of iii. Ideally the drop continues to at least tap 74.75 before much of a bounce.
Dollar Index
Also, nice to see DX bounce up from 104.20 today. This is a wave [iv] candidate but needs DX up over 105.65 and 106.20 for confirmation of a reversal.
Euro
Euro poked briefly up to test the 1.0603 target before falling back under 1.0557 and thus this is a wave [iv] candidate. Bears need under 1.0480 and later 1.0465 to feel good about a possible reversal.
Gold
Gold moved lower today after printing an exhaustion signal from the 9-5 study and negative divergence on the smoothed RSI. The drop under 1797.00 is initial confirmation of a reversal. Now bears need to drive GC under 1775.40 and 1763.35. It would be best the there is an eventual drop under the daily moving averages before a bounce to retest the averages from underneath.
S&P 500
Nice move down in SPX today which followed the morning plan. I certainly prefer lower, but bears need to drive SPX under 3994 and 3964 to feel good about a reversal.
I’m assuming that the low late on Monday was a small third wave and now due for a consolidation in a four before another push down to complete the first impulse down from the possible [b] wave high.