FOR THURSDAY: (7/20) Trade waiting on ECB for Thursday and then to FOMC for July 26. Markets will get more sluggish as we get closer to these next fulcrum points. Still nice and slow steady trading in places. Cycles are looking friendly for Thursday and remain bid for stocks going into the weekend.
SEPT. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR THURSDAY: (7/20) S & P hit Friday’s target finally but computer models now project 2479.50-81.00 and larger pattern not complete till 2493. Cycles are the best of the week on Thursday so there’s still some room to buy before volatile ECB.
Patterns to the upside project 2520 but that may be 2-3 weeks. We had short-term resistance at 2479.50 as a place this market should temporary stop with pullbacks not more then 20 points when they happen so the market should stay above 2460.
OVERALL: Market will need to take out 2440 to issue a stronger sell signal. Wednesday a
Doing some larger work on longer-term patterns. At least 2493 or 2525 will come in by August high but pullbacks into October will probably hold 2325 so crash scenarios are just not there but a 10% correction into the fall will seem like a lot for a market that has only 1 elevator up button.
We are concerned about pre-FOMC congestion and wonder if we will get the divergent high, and then a 20-point band congestion at some point soon.
WEEKLY CHART: We are not thinking that the market will fall apart dramatically in July, but we doubt that there’s enough time and room for 2520 to come in this summer before things get complicated August-October. The market does seem like it will hold up into July 25. Seeing lots of congestive action and it may not fall apart until after August 5 or 9.
CYCLES OVERVIEW: Higher Thursday; sideways to higher Friday.
