S&P is growing closer to its Short-term upside technical target of 5521, while QQQ also is nearing resistance a bit higher than 483-5 mentioned last week. Overall, there remains no evidence of weakness in SPX, nor QQQ, and until price violates the rising 5-day moving average and confirms daily exhaustion signals, trends remain bullish, and it’s wise to stick with this trend.
As mentioned last week, more than half of S&P’s major 11 sectors have been lower over the last three months and 3 of the 4 major sectors which rose 1% in Monday’s low volume trading (Discretionary, Financials, Technology and Consumer Staples) remain in short-term downtrends from April and/or May peaks.
Overall, it’s thought that Technology might be approaching a short-term area of resistance this week following a strong comeback over the past month. While uptrends have not shown evidence of any waning in current trends, factors like seasonality, DeMark exhaustion as well as cycles show the possibility for a short-term peak in price which might play out after this week’s Quad expiration.
While it’s difficult to suggest anything more than just a minor 2-3% pullback into July, it’s imperative that sectors like Financials and Healthcare start to show some evidence of strengthening sooner than later, as both have been under pressure since April. However, my thesis of a weakening US Dollar and Treasury yields looks to be materializing, and this should be supportive of risk assets into the early Fall. Thus, it’s expected that weakness in the back half of June should prove short-lived and make SPX attractive for further gains into August.
All in all, despite what DeMark indicators are reflecting, or the lackluster trends in many sectors outside of Technology, it’s important not to put too much weight on counter-trend tools when trends remain pushing higher. If/when evidence arises of uptrend line violations in the major indices late this week into next, then it will be right to mention what’s happening and what consolidation might be expected.
However, as a trend follower, the most important technical tools are price and time, not sentiment, nor seasonality, nor cycles, nor DeMark indicators. Until we see evidence of trend failure which leads to pattern deterioration, the trend remains “our friend, until the end”.
As weekly Symbolik charts show below for SPY, there stands a chance of both daily and weekly DeMark charts showing exhaustion following this Friday’s June Quadruple expiration based on the formation of TD Combo and TD Sequential indicators on daily charts while the weekly might produce a 9-13-9 pattern. ( TD Sell Setup, followed by TD Combo/TD Sequential countdown pattern, followed by another TD Sell Setup.) (While not shown, monthly SPY charts remain premature to show any counter-trend exhaustion and do not reflect the signals shown on QQQ charts (which remain unconfirmed).)
S&P 500
Source: Symbolik
Overall, I do suspect that SPY likely finds short-term resistance above 551 into early next week (this should equate to SPX getting to 5521 before stalling out). However, I expect after some short-term consolidation, higher prices still materialize into mid-to-late August.
Copper should be bottoming and turn back higher towards May highs
The chart below shows the daily September 2024 COMEX (CMX) Copper futures chart which has now pulled back to an area which signifies support on this weakness.
Prices have now retraced 50% of the prior advance from February 2024 lows which also lines up with Ichimoku Cloud support. While one cannot rule out weakness down to $4.25, I’m skeptical that prices weaken this dramatically before stabilizing and turning back up above $4.60. Such a rally would confirm that an advance back to challenge this year’s highs is underway.
Overall, I am bullish on Copper for the months to come, but would grow more cautious on a challenge of 2024 highs into August-September timeframe (discussed in my Copper cycles discussion below). At present, prices seem to be at/near support, and I expect Copper to bottom and rally back to highs. Stocks like FCX -1.90% which are closely correlated, are attractive to consider on recent weakness.
Copper Futures
Copper should have upside into August, with a maximum rise into late September before weakening
This weekly cycle composite for Copper has been quite remarkable over the last 15 years, and is thought to show a possible peak for Copper approaching this Fall.
A composite of the 185-week cycle along with a 45-week cycle combined with a few other cycles is used to form this composite which has provided four of the last five intermediate-term peaks in Copper since 2007.
Lows also materialized based on this composite in 2009, along with 2012, 2016, 2020 and 2023.
If this forecast continues to work into 2026 based on historical cycles using the current phasing of these cycles, then a possible Copper peak might materialize into this Fall, ideally between August and October.
Initially, I suspect a sharp rally to test and possibly exceed 2024 highs can happen into August. Thereafter, I suspect the balance of the year should prove far more difficult for Copper.
Copper’s weekly cycle composite looks to peak out in August of this year. Meanwhile the daily cycle composite (not shown) arguably peaks out in late September.
Overall, I suspect that strength in Copper in the months ahead likely won’t continue into 2025, but could prove to reach meaningful resistance sometime in late Summer of this year.
I’ll address this in more detail in the months to come. At present, UPTICKS list stock Freeport McMoran (FCX -1.90% ) should be nearing attractive support between $45.50-$47 which should provide a floor to recent weakness, and result in this turning back higher to the mid-$50’s. FCX remains appealing at this time technically speaking and remains on UPTICKS.
Copper Weekly Cycle Composite
Natural Gas should be nearing support after last week’s decline
Lows look to be approaching for Natural Gas following a sharp decline in recent days. I anticipate an upcoming bottoming and rally into October before a decline into 2025.
Following the successful retest of May highs, NYMEX Natural gas has now fallen for four straight days. Yet, trendline support on July 2024 Natural Gas (last trade 6/26/24) should materialize near $2.69 and provide a floor for recent weakness.
Overall, momentum and trends remain positive, and the Natural Gas weekly cycle composite (shown later in this report) seems to suggest higher prices into early Q4 before a decline into 2025.
Natural Gas proxies like UNG -2.54% likely could find support near $18-$18.50 before pushing back higher to challenge and exceed $21 in the months to come.
Natural Gas Futures
Natural Gas cycle composite suggests a rally into October 2024 before weakness sets in
One of the main cycles I utilized for the Natural Gas composite was the 63-week cycle along with 125-week cycle. When combined and a couple others are added, it shows a fairly good track record historically for many of the swings over the last decade.
If this composite works going forward, it would suggest that prices still have the potential to rise into early October before a peak happens.
Overall, I view recent weakness as making Natural Gas attractive for gains into this Fall. However, this very well might peak out prior to the US Election and decline into 2025 if this cycle composite holds up.
Natural Gas Cycle Composite
(The pink line shown in these composite charts represents Amplitude, not magnitude. Thus, price does not have to follow this pink line to the extent shown on the chart. Furthermore, the turning points are more important than the extent of the swings in either direction. These cycle composites were created based on combining the historical cycles with the highest strength and Bartel score in an attempt to project the possible course of future prices. However, this is just one small part of the analysis and other factors should be considered.)
