The Day Ahead: PM Edition 2024-07-11
Ending the week with PPI
Bonds
The [I]-[II]-(I)-(II) idea that I have illustrated on the intraday chart looks better than what I had previously. This count implies a steady grind up now that ZB is over the daily moving averages.
Crude Oil
Crude is on plan rising out of a wave (IV) low, likely in wave III of (V). First target is at 83.70 but I like 84.30 or 85.00 better.
Dollar Index
DX is being a bit of a problem child falling back to just above the 103.90 support. DX has been moving sideways for three months now. I expect an eventual upward break which should be relatively strong.
Euro
I don’t think I have the right wave count right now. The wave [II] idea is still alive but under duress. This is acting like a higher degree wave two is still active, either ii or (ii).
Gold
Gold did well on Thursday as it made a new swing high. Bias remains higher while above 2402.90. Next target is 2453.00.
S&P 500 Futures
Well, that was interesting. I expected a retrace today but didn’t think it would be this deep. That said, the wave IV idea is still valid and expect futures to work to hold above 5623.00. The practical limit for wave IV is probably around 5600.25 which is still above the swing I’m labeling I back on July 3rd.
NYSE Composite
I’m including this daily chart of the NYSE Composite to point out that while Nasdaq and the S&P 500 were under pressure today, the NYSE, Dow, and Russell 2000 were all up. Not only up but remained bid all day. I am reluctant to call a top in the S&P 500 until the NYSE and Dow make new highs. Could there be intermarket divergences at the high? Possible, but I don’t want to plan on it.
Another chart I have been keeping an eye on is this one of the percentage of S&P 500 components below the 20-day moving average. You can see how breadth recovered today and is projected to have a cycle low near the end of the month. This is another reason why I’m reluctant to call a top in the S&P 500 or at least allow for a deep retrace up.
