Friday, September 2, 2016

MTU Weekend Ed. - Monthly Outlook Update (9/2/16 close)

Stocks, Bonds, USD, Gold - key intermediate term scenarios to watch

SP500 made a fresh all-time high in August. Since then, stocks have been consolidating and appear to be preparing for another advance (Chart S1 blue and green).

However, August was also a month full of distribution attempts. Using data on the ETF SPY as a proxy, we highlight major distribution days over the past month in Chart S2.

So we keep an eye on a potential deeper down-swing (Chart S1 gray) or a potential topping process (Chart S1 red) at several degrees (Chart S3 and Chart S4).

The 10Y U.S. Treasury yield index is at another key juncture fighting the neckline (Chart B1). Chart B2 tracks near term upside potential in yields. Yields could reverse soon after completing a (likely ending) diagonal triangle (Chart B2 red), or can make a more meaningful advance in a post-triangle thrust (Chart B2 blue).

The USD index is still stuck in a 2-year-long range. There is no major changes in tracking scenarios (Chart $1 and Chart $2)

We are tracking the 2016 upswing in Gold as either a completed five-wave advance (Chart G1-blue) or an incomplete diagonal triangle with potential to test the 1450 area (Chart G1-green). Both of these structures would fit into our larger degree tracking (Chart G2-green and red).