The Day Ahead: PM Edition 2024-08-06
Equities bounce a bit
Bonds
ZB has been slipping back from the high made on last Monday in what I see as a possible wave [IV] at testing a good target for said fourth now at 123^17. We will see if ZB follows the intraday cycle up from here into Thursday.
Crude Oil
CL wasn’t able to push past the 74.65 resistance on the first attempt but is holding above the Monday low. I wonder if crude could now put pressure on that resistance and grind past toward 76.10.
Dollar Index
DX looks to be positioned well to grind over 103.16 as the RSI is ready to turn up from oversold. Bulls need DX to push over 103.16 and build a little base above.
Euro
Euro has moved lower from 1.1032 but not yet clear that the wave (ii) has been set as we have yet to have a clear impulse down on the intraday chart and a drop under 1.0911.
Gold
The good news is that gold pressed down from 2458.60 but has yet to make a new swing low. I favor lower while under the 20 EMA on the 240-minute chart, now around 2450.00.
S&P 500 Futures
The S&P 500 behaved much as I expected on Tuesday as it chopped sideways. What concerns me is that bears couldn’t drive S&P 500 futures under 5243.50 and that we see ES above 5300 in the early hours of Wednesday. While a wave [IV] is technically still possible, if bears fail to strike later on Wednesday, I fear bears have lost the plot and the narrative that the Fed is going to save the day with rate cuts will drive the markets higher. As you may infer, I’m pretty close to switching over to the alternate count which treats the low on Monday as iv of an ending diagonal and the rise from that low as [A] of v. As a reminder of what this will look like, here is the daily chart.
