FOR FRIDAY: (7/6) Very difficult day to trade. Cycles look positive for stocks but will the trade fade any news? We continue to go with price and pattern and we’re more inclined to expect a downside resolution for stocks into the weekend. Market is currently bid on hopes for some China resolution–and if it comes, then the market may gallop and leave the bears in the dust.
SEPT. E-MINI S & P 500
S & P ANALYSIS FOR FRIDAY: (7/6) Market went to the upper end of the congestion triangle and a bit beyond to 2738. Lower end of the congestion triangle is at 2706.50, which could be the first place the market falls. Anything above 2740 overnight may open the market back to 2751, and hard to tell here at the close. Lot of news to digest in the next 24 hours with no one around would suggest we could easily see both ends of that range. We still have a bias for a break to the downside on Sunday night and counter-sanctions from China could give us the typical Sunday meltdown that has been strong over the last month. Our thoughts about 2780 seem a bit far-fetched at the moment. We have to favor the choppy scenario followed by a breakdown despite some cycles the next two days that are frothy and idealistic.
CYCLE SYNTHESIS: Higher Thursday/Friday; lower into July 8-12.
