FOR TUESDAY: (7/18) Not expecting a lot of action this week. Reports are not that significant and summer vacations dominate. We’ll continue to go with short dollars and long gold over the next week. Cycles are very volatile and any surprises overnight could be exaggerated in thin volume.

SEPT. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.

S&P ANALYSIS FOR TUESDAY: (7/18) Not much to add to this morning. If upper numbers reach overnight, we’re open to a minor pullback that will stay above 2450 for a few days. The breakout above 2450 now projects 2466-69 and NQ hit upper target of 5840, which means 5870 is next. New highs on NQ by early August would reach 5987. Very possible that higher numbers will be in by early Monday and then the market may congest lower the rest of the day.

Doing some larger work on longer-term patterns. At least 2490 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.

Day traders will be advised how to trade the ranges today but very tight ranges overnight don’t tell us much. More money always to be made on NQ which needs 5870 by tonight.

We expect to slowly grind our way higher to at least 2490. Again, there’s still time to even reach 2520 on the S & P and you never sell a market in new high territory. The game continues. Bears will have to wait until about the 2nd week of August for the market to come off and then we think a 10-15% correction into October.

WEEKLY CHART: We ran cycles through August and they are mixed. 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: Lower early Tuesday; higher Wednesday/Thursday.

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