Lee AdlerGold’s price is moving toward a test of projected intermediate term wave channel resistance in the xxxx range. Projections point to xxxx in September- October. The indicator patterns suggest the potential for an extended run.
The S&P is testing critical support at 6400 this morning as cycles remain mixed. Long-term signals are still bullish, but cyclical breadth weakness and narrow leadership continued the warning last week that the uptrend was narrow and fragile.
Long term and intermediate term buy setups were again predominant, and about 40% of those met short-term trigger criteria. There were three times as many buy setups as sells. Only 3 of the sell side setups triggered short-term sell signals.
Primary dealers are propping up record Treasury issuance with no cash cushion left. Every new purchase is repo-financed. Hedge funds are pressing shorts. Net exposures look balanced, but leverage is surging toward the danger zone. Stability here is an illusion — and when it cracks, it will happen fast.
Long term and intermediate term buy setups were again predominant, and about 40% of those met short-term trigger criteria. There were three times as many buy setups as sells. Only 3 of the sell side setups triggered short-term sell signals.
The S&P 500 has formed a well-defined pennant, with breakout direction set to determine the next major swing. Cycle projections point to xxxx short-term, and ultimately to xxxx later this year. Cycle indicators suggest that the direction will be xxxx.
Gold appears to be in a high base consolidation, which would normally lead to a breakout. Gold stocks are far stronger. Here’s what looks good, and what signals would suggest failure and danger.
Macro Liquidity Indicators and extreme leverage continue to suggest that the stock market is in a topping phase.
The S&P 500 rally remains intact, but its narrow breadth and clustering at resistance levels raise questions about durability. Cyclical signals show strength, but divergences warn of fragility if momentum fades.
Long term and intermediate term buy setups increased to nearly one quarter of the 1775 stocks that met minimum price and volume criteria last week. But there were also many sell side setups. Setups are not guarantees. They may move in the direction of the setup or they may not. But starting from this point normally leads to success if the short-term triggers are hit. The raw numbers are not particularly useful as broad market indicators.
While gold stocks have surged, the metal itself remains rangebound. A daily close above xxxx should trigger a big move. The Cycle Wave Composite has flipped to the buy side, suggesting the onset of an intermediate up phase with projections pointing as high as xxxx. However, it would not take much to abort the rally. A daily close below xxxx would suggest it.
The Treasury’s funding needs, combined with the end of the Fed’s RRP market support fund, stagnant repo activity, and extreme margin leverage, create a setup that looks like a late-stage bull market. The markets are holding for now, but the pillars are stretched, and the risk of a sharp reversal is rising.