FOR WEDNESDAY: (7/5) Post-holiday volatility is always a bit crazy and even if we have idea of what’s going to happen we often have to let the dust settle with surprises. Stocks look higher on Tuesday/Wednesday but then lower into the employment report. Gold may have a 1-day bounce but in trouble the rest of the week and the dollar looks higher into Friday before the G-10 meeting.
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SEPT. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR WEDNESDAY: (7/5) Market stalled at key resistance at 2436 and we had noted that area would probably halt rallies. The market is often up on July 4-5 so we’ll give the market a chance for 2443-4 on Wednesday and then it is a sale into July 10 and we have to be open to 2390 coming out given that the market is struggling.
OVERALL: Not thinking that the market will get much above 2344 into Wednesday and that makes us wonder what the low of July 10 means. Still, until 2390 comes out, bears will have to claw their way. The rally into Wednesday has every chance of being feeble and wobbly with no one trading and that has us concerned about the next push down.
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 5, retrace into mid-July and probably hold up into July 25. Seeing lots of congestive action and it may not fall apart until after August 5.
CYCLES OVERVIEW: Higher into July 5; lower into July 10.
