The Week Ahead: 2024-12-22
Christmas week
Bonds
ZB pushed to a new swing low on the move down from September high last week and tested the next major target for a (b) wave low at 114^21. The Wave 59 9-5 study has a possible exhaustion signal present with this new low. I of course can’t rule out a push to the next (b) wave target at 111^03 but don’t think it is in any way required as I think it possible to count out the decline as a completed structure on a lower time frame. The most likely alternate to the (b) wave hypothesis is that the wave (iv) I have back in 2023 needs to be moved to the right which would make this wave (v) down in development.
Crude Oil
Another week of CL moving sideways under 74.15. I of course can’t rule out some bounce, but I have to think that two months of sideways indicates weakness.
Dollar Index
On one hand, I am happy to see the strength in DX as I think it will go much higher but in the short-term, my idea of a minor correction hasn’t been working too well. I still prefer a pause but may have to throw in the towel and just learn to love the grind if DX spends much time above 108.50.
Euro
Euro is back to leaning on the 1.0400 support. Next big inflection in the cycle composite is the first week in January so possible I have to wait another week before a bounce attempt.
Gold
Gold was under some pressure last week but did manage to recover 2630.40 after a brief poke under. I suppose it is reasonable to expect gold to stay in the range marked by 2630.40 and 2696.00 for the next week or two.
S&P 500
Last week was an exciting one with the FOMC drop and recovery on Friday. Is the high in? Possible but I have to give bulls a chance for a minor new high while 5814 holds as support. I expect the next week or two to have a mild bullish bias and then see if either a lower high or new high forms in January.
Bitcoin Futures
I have to say I have the same outlook on BTC as the SPX. I can’t say conclusively that the high has been set though it might have been. At a minimum, I think we should expect much of the drop of last week to be recovered at which point we will see if bears have what it takes to set a lower high or if yet another high forms.
