The Day Ahead: PM Edition 2024-12-19
Core PCE on Friday morning
Bonds
ZB dropped under the 114^21 support today to push for an intraday target at 113^20. I’d rate this a ‘c of (b)’ candidate but probably best to wait for at least 114^09 to be recovered if not 114^21 as proof of a reversal.
Crude Oil
CL made an attempt at moving higher early but wasn’t able to push over 69.80 and fell back to end the day lower. I see the current location as a sort of no-man’s land and thus waiting to see if it can either recover 69.50 and push up or fall under 68.70 at which point I will have a bearish bias. Given that both the intraday and daily chart have possible cycle lows on Friday, I’m reluctant to have a bearish basis at this time.
Dollar Index
DX was higher on Thursday but not by much and appears to be stalling a bit. I continue to dig in my heels and expect another leg down prior to the next serious leg up. Best to let DX slip under 107.98 for proof of ‘[C] of ii’ down starting.
Euro
I think Euro may finally have a [B] wave low set but needs to recover 1.0466 to feel good about it.
Gold
The daily support at 2600.95 held again on Thursday which makes it an aggressive wave [I] candidate. Now looking for a move up to around 2633 which is the 20 EMA on the 240-minute chart or 2640.90 just above. I think the form would look a little better with another low, but this might be a case where the support, in this case a Fibonacci extension down, runs over the wave structure. Probably best to wait if you want to play a bounce for better bounce for gold to get above 2640.90 as another low is possible.
S&P 500 Futures
The S&P 500 did what I expected on Thursday, bouncing to test 6006 before turning lower. On the 240-minute chart, the choppiness of the day is obscured as there was a fair amount of sideways movement prior to rolling lower later in the day. If short, it is probably wise to lower stops. I expect a bounce on Friday, but I suppose the PCE number on Friday morning could cause problems if it is too hot.
