SPX futures opened at 6:00 pm last night down 15 points. It sank another 10 points before catching a bid and recovering all the loss. The Premarket is currently up 2 points. The overnight action suggests a potential target near 2075.00.

ZeroHedge reports, “Surprise! The weakness overnight in US equity futures has been eradicated in its best USDJPY-driven fashion. S&P, Dow, and Nasdaq futures have all managed to float higher on a sea of Crude and JPY carry exuberance to fill the overnight gap perfectly... except now that they have, USDJPY and Crude have turned down...We suspect the word "contained" will win CNBC-Bingo today...”

Last week’s low in TNX at 17.00 was not deep enough to satisfy the Ending Diagonal pattern, IMO. I have revised the Wave pattern to accommodate a further rally in Minor Wave B before a Minor Wave C takes TNX to approximately 15.00. On that note, I am not sure how high Wave B should go. It certainly may go as high as the mid-Cycle resistance at 23.77, but I suspect that the 50-day Moving Average at 21.33 may snag the high in this move.

Gold futures declined to 1276.90 at 7:00 am., bolstering my claim that a retracement high is in. It is currently trading at 1284.80.

Goldman Sachs takes the cake, blaming the Central Banks for not being more bearish on gold. What a pile of misdirection.

Crude futures fell to 44.36 before finding support and bouncing back up to the 45 handle. This also supports the idea that the correction needs a little more time. The Cycles Model suggests that, if this is so, WTIC may bounce back to its 50-day Moving Average at 53.49 before heading lower.

This may be further bolstered by the report from Bloomberg, observing that, “Hedge funds boosted bearish wagers on oil to a four-year high as U.S. supplies grew the most since 2001.”

More to come after the open.

Regards,

Tony

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