Gold–A Safe Haven?

Given the current environment in the world, gold should come to life. Seasonally it often does better the middle of August and we are just waiting for the next crisis to hit and there are a number of cycles the week of August 11-19th for something to happen–whether Iran or something else.

Gold got to 2420 overnight on August 8th and  held above the key 2411 area.    It still is acting like “failure to launch” .   If 2398 comes out there is a small chance for 2371.    Gold is not in big trouble unless 2360 comes out for a major breakdown.  Originally we had a cycle low here and gold is one of the safer things to be in at the moment and it is more oversold.

We generally see higher the next few weeks and expect to see 2640-55. If the market takes out 2350, we will have to revise the count. The market looks higher for a recovery into August 19^th-22^nd.  It’s very possible that if gold can spurt in August that we will not worry about the new low into October.

OVERALL :  If we get an x-factor crisis in August, there are still patterns that would allow 2660. Until we see the August high, it will be too much to estimate the Oct low.

GLD, the ETF could pop to 235 or 247.  GDX has been underperforming and we worry about miners if the stock market lays another egg next week. Silver has been underperforming but has put in a number of positive divergence.

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When does the Next Shoe Drop?

Monday’s crash in Japan that spilled over to the US is far from over. Usually when these larger corrections happen they can run 4-5 weeks. This week is a bounce and should allow us to get out of any remaining length and to get positioned into shorts.

The week of August 11-16^th looks more vulnerable for another break in stocks even if we get a rubber-band bounce this week.  That week could be a 3^rd wave down and be more dramatic than the estimated 600 S & P points that have already happened. We can easily see lower prices into the end of August and they could extend easily into the first week of September.  That would get the market oversold and ready for a pre-FOMC optimistic bounce.

The elephant in the room is Iran’s pending attack and to what extent the rest of the world will get dragged in.

So what levels will a bounce go to? What is the estimated target for the Sept. low?  How do I make money in this situation? Is there hope for next year.   Stay on top of these questions by getting a 1 month trial of Fortucast Timers for 97.00/month.

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BLOW-OFF PHASE FOR STOCKS COMPLETING BY MONDAY

The surge in NQ this week was great and we had started to see it last  Friday and into the weekend but it is mostly APPLE and NVDA although Tesla is participating today.  RSP, which is the equal-weighted S & P is below the old high of 169 by about 3 points and is not confirming the action of a few stocks.  Extended NQ cash targets are 19677 and 19884 and even up to 20068 and could complete Friday or Monday.  Cash NQX  closed at 19465 on Wednesday and futures were only 31 over at settled on June on Wednesday.

On the S & P Cash We are favoring the completion of the 3^rd wave off of the May 31^st high which projects 5466-70 on cash and would be followed by a 100 point break to 5366-70 on cash and then probably a divergent high or double top toward 5490 or 5510 on S & P  cash. The divergent high does not have to come in.

APPLE:     Apple hit 220 overnight and has resistance at 221.98. If they continue to go bananas, 240 is the extended target.  The cap on this stock is making it seem like the market is running away.  The weekly chart projects 253.  It will come back to 200 later in the month.

NVDA:  NVDA continues to look good and we may hold out for 131.00 before considering profits as we had a target of 131.2 before.  Technically it seems ok above 115.50-115.80  holds.  .   A 4^th wave target into late June could go to  1076which would be 107.60 after the split.  There  is an upper target to 131.70.  If the market accelerates, targets are up to 141 and 160 even but we are running out of time but will give it a few more days.

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THAT ELUSIVE STOCK MARKET TOP 

While Dow Transports and Industrials gave early topping signals and Russell has been struggling, NQ and the S & P have not give it up yet.

We are still friendly stocks for about a week until S & P cash hits 5400 and not in trouble unless S & P cash takes out 5250 now. NASDAQ 100 June futures  went and held key support at 18240 on Friday. The S & P only managed a 3-wave fall although it did hit 5193—a bit deeper than we had liked. The astonishing close  last Friday  kind of thing funds love to see and so often 1st of the month buying comes in.

Cycles look positive the week of June 3rd and into the FOMC.  We had  alerted you for secondary highs into the FOMC and they are starting to manifest. We are clear about a fall from June 12th into June 20th and then will evaluate the pattern.  Because the market only fell in 3 waves and NQ fell to the minimum support area, new highs on NQ to 19200-19300 are very likely. We cannot rule new highs on S & P cash to 5400 or a bit higher.

Cycles seem more clearly lower after FOMC June 13-20th and into June 28th. Hence we can see the market doing a secondary high into FOMC. When the market does top, the first place it will go is 5150, and then 4850 and 4650 into the summer.

OTHER MARKETS:  Bitcoin looks good and we waited too long but once 76800 comes in it is overbought and hard to chase and not that much room but some still.

T-notes are close to issuing a buy signal and we have to watch TLT but would have to wait for 9100-9050.

Energy is still in trouble this month and crude futures have key support at  7090 but may not be done until the market gets to 6700 or even lower.  We have time windows in our newsletter.

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SIGNS OF TOPPING STOCKS

(5/30): DOW futures are still shedding and got down to 38140 overnight. S & P cash got to 5235 overnight which was closer to the minimum target of 5225-5220.  NQ held 18657 overnight on futures and is the only safe place that funds feel good about parking money—but for how much longer?  We rarely like being long the last day of May but there is a positive cycle on Friday and if the PCE is not inflationary, oversold conditions could spark a rally.

Futures held their breakdown area overnight at 5244 and still could reach up to 5370 as we move into the FOMC meeting.  Cash got closer to issuing a breakdown but not quite.

Patterns on cash look like a bounce to 5270 and then a new low to at least 5220 at least. That would go with our end of the month fall but cycles are mixed for surprises on Friday.

The broader market has confirmed a top but NQ and S & P cash have not.  NQ cycles are friendly on Thursday but the larger energies have a lot of unraveling energy operating.  NQ is still holding up but more cracks appearing S & P futures have to hold 5244 for 3 waves down or we will see 5225-5220 on futures  before a bounce.

The backdrop in Europe is a bit unnerving as they are starting to call for mandatory conscription and pushing the war with Russia there. We have to watch the International Stock market index IWM which made a new low on the move to issue a sell signal and got to 201 overnight and could retest 200.70 the next few days before hitting an oversold situation.

All the bearish indices are oversold and we have to get secondary highs or new highs into early June to set up a nice short.   DOW Transports are often a leading indicator for topping action and topped out a few weeks back and Dow Industrials issued a sell signal earlier this week.

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Stock Market Top Signal Confirmed–What’s Next?

We had discussed that a close under 5090 on the S & P would be a first topping signal for stocks and the 2nd one will come with a close below 4936 on S & P cash.  We do see a secondary high into April 22-28th but it is likely a secondary high

We do have a bias for a low into Friday but now the context is looking like at least a move to cash 4955 or extended to 4903. Key support for one more low today is at least to 502 or 5207 on cash.  We will get a retracement of the fall from 5265 on cash to Friday’s low  and there is a gap at 5200 but maybe that is where it goes into April 28^th.

We have been getting signals that something is wrong with the break of XLK, the eroding bond market and the strong dollar.  . We have several crisis cycles this month on the geopolitical front but they could take their time to manifest.  We have one into April 19/20 and then another into the first week of May.

We have warned you for weeks that if oil breaks out and projects 98 or 106 or higher that is not going to help the Fed’s easing stance and inflation will run away. We had a key inflation cycle high for May and it appears on schedule.  The CPI went up because of food, energy and housing costs.

Obviously it is time to raise cash and consider shorting and hedging strategies.  We have an August 2024 low and our daily timer have targets.  Stay on top of daily gyrations with the Fortucast Financial Timer or the Fortucast ETF Timer. Sign up for a 1 month trial at Fortucast.com for 97.00.

We got our hawish PPI print and we can throw a June cut out the window and that has been obvious since oil took out 80.00 a barrel.  We are still waiting to see if key S & P prints 5090 on cash and 17830 on NQ futures can develop  and start to break the camel’s back and project 5 waves down into April 19^th.   The 60 minute MACD is very oversold and a bounce into Friday is possible if PPI turns things around.   The international index, IWM is starting to confirm what we have been telling you and while 5300 on S & P cash is not destroyed, the chances are down to about 30% for us and we have suggested raising cash and exiting.

We have the dollar higher into April 20^th and does that mean that metals will take a bit longer to put in a 4^th wave and go deeper. We worry if we get out, we will not get back in but there is reason to take some partial profits and then buy again on dips keeping the bigger picture in mind.  We have targeted 2290 as a 4th wave pullback for June gold.

We continue to watch TLT for a move to 8925 but its hard to trust the bond market with our oil outlook.

So continue to raise cash.  We has suggested some SDS for short protection and hedging and if you keep the big picture in mind for an August slow for stocks, you will do well.

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