Bonds
Bonds have been resilient the last few weeks on a combination of flight to safety and expectations that the Fed will soon begin to reverse course on interest rates. I’m somewhat skeptical of the Fed caving soon but acknowledge that this could be the first stage of a broader correction. I do think cycle analysis points to an important inflection point near here that can either turn bonds back down or act as a support for further bounce. I lean towards retrace if not a retest or outright new low in July or August.
Crude Oil
I’m quite pleased with how well crude is behaving with the major thrust lower last week. I am penciling this in as a wave [III] thrust of wave v of (c) of [ii]. The dominant cycles suggest CL will be under pressure into May. The 50% retrace of the 2020 low to 2022 high is at 55.20. Long time readers may know that in general I’m not fond of the 50% retrace as a target for a wave two but the 62% retrace in the 39 handle seems a little unrealistic to me. Perhaps it eventually overshoots the 50% retrace to test the prior fourth and dips briefly into the high 40s.
Dollar Index
As I have been talking about for a few weeks now, I think DX can use a minor retrace and that appears to be taking place. I suspect DX forms a higher low into a major cycle period near the end of this month and begins to climb into the next major cycle inflection late in August or early September.
Euro
Same idea here as DX but the inverse where in this case there is modest retrace or consolidation before breaking under 1.0571 on the way to at least 1.0226 if not on to a retest or new swing low later in the year.
Gold
Gold has been a bit of a problem child as it has been resilient though I suppose that is understandable considering the current banking scare. I remain skeptical of it preparing for a serious liftoff on the way to 2200 and above just yet. Rather I think there is another move lower first, preferably to retest the low from last year but might only turn out to be a higher low. I’ve drawn in some floating parallels for geometric reference. In addition to being at the top of one possible channel, it also has tested a Fibonacci extension target up from the low, a 1x0.618 at 2013.15. It is incredibly tempting to fade the fear but probably prudent to first see a drop under 1970.20 first as early proof of a possible reversal.
S&P 500
SPX put in a minor bounce last week. The question at hand is that it or will we see a bit more consolidation before breaking under 3803? I’m open to something a bit over the high from last week but lean to an eventual break under 3803 and the December low.
Bitcoin Futures
Is the low in BTC set? Maybe. The wave (iv) hypothesis is not dead but is under pressure. I’m flipping the wave (iv) idea to the alternate count but something that I will keep an eye on. If BTC can get over 28550, expect further gains so as to test 33200 or 35430 in the next few weeks.