The Day Ahead: PM Edition 2024-10-07
Crude stayed bid on Monday
Bonds
ZB took a hit last Friday when it dropped through 123^10 and pushed to the next target of 121^27. I think it fair to think there will be a minor consolidation or bounce and another low to complete a five-wave impulse for ‘(C) of [A] of iv.’
Crude Oil
CL pushed through the 74.70 daily target today to test the next target at 77.50. What is interesting is the reaction in the overnight where we see much of the advance being given back. I rate this as a possible wave ii high. Bears get something started if CL drops under 75.30 and feel pretty good about a reversal if under 73.90.
Dollar Index
DX has pushed up over 102.10 but wouldn’t chase it now. Let us see how DX reacts to the cycle turning down into Friday. Bulls want to see a higher low form into the end of the week.
Euro
Euro moved lower today but is pretty stretched in the short-term. There is bullish divergence on the intraday chart of the RSI which supports the idea of a bounce. As to form, I’m leaning to the low today being a low degree third and due for a wave iv bounce before a final low on the swing to complete the first impulse down.
Gold
Gold has been pretty choppy for the last week mostly trading sideways. I’d like to see gold slip under 2655.40 to test 2640.25 or 2630.00. Probably too aggressive to fade with conviction till gold is under the daily moving averages.
S&P 500 Futures
The S&P 500 slipped lower post 10am today as it retested the lower end of the range late in the day. For form, it isn’t clear as so far, the decline has been choppy. I’ve sketched in a possible leading diagonal down as an aggressive bearish option if we can get a new low on Tuesday.
