FOR FRIDAY: (7/14) Not expecting much with a summer Friday where everyone has left for the beach early and then they come back later on Monday. Willing to be short gold but not seeing much else for Friday.
OVERALL: More Yellen testimony and the 2nd day does not mean much. World stocks remain friendly and thoughts are for 2 rate hikes next year and dovish energy is supportive for the world. Would like to see the dollar make a slight new low and buying the dollar is somewhat countertrendish.
Energy is still expansive for stocks and bad news out of Washington doesn’t seem to rattle the market, as greed knows no bounds. Still room to buy T-notes and sell metals with next key target into July 18. We still would like to see lower pattern come in on the dollar to 9510 but it doesn’t have to.
SEPT. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR FRIDAY: (7/14) Not much change from last night. Probably a trading range between 2440-2450. Cycles are strong enough that we can still buy dips. NQ almost hit key first resistance at 5814 and could sail easily through 5840 easily. Just wondering if end of the week profit-taking will set in. Cycles are positive enough even for a breakout above 2450 but more money NQ.
The most bearish scenario would allow a retest of 2412-14 before the market goes higher. NQ is more likely to sail up and pull stocks with it. I doubt we’ll get that big a pullback but it could happen if 2450 happens and the market chops its way lower into the FOMC announcement.
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 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 or 9.
CYCLES OVERVIEW: Sideways Friday.
