The Day Ahead: PM Edition 2025-01-02
Not exactly the start of the year equity bulls hoped for
Bonds
Bonds made an attempt to move higher early this morning but gave back much of that advance though managed to close above where they opened. My view hasn’t changed in that this is either a higher low forming or conversely extremely late in the decline from last September. Net, a bad place to be short but admittedly maybe a little early to be long. Best initial confirmation of a reversal up is getting above 115^00 and the daily moving averages.
Crude Oil
CL on plan today with a strong move up which is probably a low degree third with the next target at 73.80. Could it extend? Certainly possible but it then puts pressure on the wave [II] idea. Could mean that it is part of a larger degree two or just a big (b) wave.
Dollar Index
DX popped up today but I’m not ready to throw in the towel on a least a modest retrace. Am I going to change the count to something like I posted in the Euro last night? Not yet but that is a distinct possibility. In the bigger picture, I expect DX to go much higher, but the little squiggles are giving me problems.
Euro
Euro dropped into a possible wave iii target today. Looking at the intraday chart, we see how the Euro found support at the wave ‘[V] of iii’ targets of 1.0253 and 1.0302. This is a good place to lock in profits if short but admittedly aggressive to go long prior to recovering 1.0378. If this count is correct, we should see a wave iv develop over the next month or two.
Gold
Gold finally gets on plan today punching up through the daily moving averages. I am making a technical change to the count, but it shares the same overall idea of the previous one. I expect gold to put in a lower high to the high set-in late October of last year. On the micro level, this move looks like a (III) in a [C] of ii. Next targets for (III) at 2678.70 and 2699.60.
S&P 500 Futures
SPX did a bit of a head fake today as there was a rise overnight up to the resistance I posted last night and thus I think most assumed there would be a consolidation up near that area but instead was sold pretty hard which pushed the market back down to near the low from December 20th before springing back up. I still think bulls have a chance to pull up out of this hole. Does it spring back on Friday or wait till people roll back into the office next week? I don’t know, but I favor an attempt to put pressure on 5988.00 again but could easily just tread water till Monday. First goal for a bull is to push over 5948.50.
