Predicting day-to-day trading with 100% accuracy is challenging due to the amount of excess noise and data. Weekly, monthly, and yearly trends for our system are far easier to forecast. Regarding the SPX, we illustrate a short term chart - so don’t panic with the big decline shown above. SPX may hold out and top into August 24th before the expected small pullback of approximately 700 dow points occurs. We expect price to hold up into Labor Day, big picture. We feel the week of August 24th will produce double-sided trading action. A decline followed by a rally or rally followed by decline. By mid next week, we should have a sharper picture of which will come first. Either way, we expect large swings in both directions. Our system is forecasting the last week of August into Sept 4th as a highly bullish period and strong recovery from the dip. After Labor Day, the stock market enters into a more precarious position in our eyes so caution will be warranted.
Sentiment charts, shown above, have cooled off and gone into short term buy territory as of yesterday. This has produced a bounce in the metals complex. We are expecting another sell-off event to start next week and for sentiment to cycle back down again.
Silver has potential to produce a higher high, $30+, into early September after the sell off, but gold and gold miners should be contained by the down trend line and not make new highs. We expect another plunge late next week breaking the Tuesday low of $1870 futures. Possible bottoming targets for late next week are $1800-$1830 futures. The week of August 24th is going to produce a powerful one-week move in metals. We think it will be a rebound from a low. Again, next week we will dial in the forecast with a sharper picture. For now, metals are in a sell-the-bounce mode with an intermediate cycle low projected for early October.
A short term top next week for restaurant stocks looks likely. They may top August 24th with SPX before a pullback that week. Whether they rebound into Sept 4th remains to be seen. We are hopeful for $13 DENN and $15 BLMN. We think taking profits in BLMN $13-15 is prudent and $12.50-14 for DENN.
We feel a close over $20 will produce a multi-point bounce in SPCE short term. We have much higher targets into fall.
We are hopeful the week of August 24th will produce our next leg up in BTC and GBTC.
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