FOR WEDNESDAY: (7/19) 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.
SEPT. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR TUESDAY: (7/19) A more ideal correction would have been 20 points to 2442 but it didn’t happen and unless it happens overnight, we may not get. Wondering if that can happen and then a 20-point correction.
Patterns to the upside project 2493 but that may be 2-3 weeks. We had short-term resistance at 2466-69 as a place this market should temporary stop with pullbacks holding 24450. Market will need to take out 2440 to issue a stronger sell signal. Wednesday and Thursday look better for upside.
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.
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: Higher Wednesday/Thursday.
