Near-term and intermediate-term technical trends remain bullish for US Equities, but it’s thought that the rally in US Stocks likely will face some meaningful resistance at marginally higher levels, which might begin sometime next week before August 20th. SPX has now officially joined QQQ at new all-time highs and might scale up to 6550 before making some kind of peak near resistance. Equal-weighted SPX and DJIA have not yet hit new all-time highs, but look poised to challenge these levels into next week. Overall, despite some of the minor concerns regarding Elliott-wave patterns nearing completion, seasonal/cyclical periods of weakness approaching and waning breadth, it’s going to be necessary to see evidence of US Equity index prices turning down in a manner that would help to add conviction to these concerns. Overall, while it’s proper not to grow too complacent in August, it’s also proper to let this rally run its course until the market demonstrates evidence of starting to weaken. For now, it still appears that the path of least resistance remains higher.
Technically speaking, Thursday’s fractional weakness proved short-lived and failed to do any technical damage.
I expect both ^SPX and QQQ 0.98% to likely advance into next week, and there stands a chance that both DJIA 0.39% and Equal-weighted ^SPX could also move back to new all-time highs.
Russell 2000’s pullback today proved to be weaker than the performance seen by ^SPX and QQQ 0.98% . However, as this shows below, following two big days of performance, IWM has pulled back to a very attractive area of support.
DeMark signals are premature towards suggesting a peak, and I like owning IWM 0.95% for a push back higher to $235 and potentially $239. It’s my thought that the next 1-2 weeks should be very good for IWM, and then consolidation into September should prove buyable for an eventual retest of all-time highs. (There was an error in yesterday’s report, which cited $185, and this should have read $235 for IWM.)
Russell 2000 Ishares ETF – IWM
Gold looks to be in the final stages of its pullback, and I suspect this turns back up sharply after the August expiration
The near-term pattern in Gold remains choppy, and many have begun to doubt whether precious metals will exhibit strength this fall.
The range-bound pattern since May looks to be in the final stages of its consolidation, which I feel should be complete in August (and potentially in the next week) before a sharp rally back to new all-time highs.
This daily chart shows that this very well might have another $30-$50 lower in the next 2-3 days, technically speaking given the Elliott-wave structure.
However, this would be quite bullish and make Gold an excellent risk/reward for buying dips ahead of a push back to new all-time highs. I favor owning Gold at current levels on a two-to-three-month basis, and feel that dips to $3300 or below should make this quite actionable for those who wish to initiate positions.
Overall, technically speaking, it’s wrong to give up on Gold, as this (along with Silver) could represent one of the best risk/reward opportunities between August expiration and mid-October.
From a trading perspective, I like buying dips over the next 2-3 days, expecting the coming end to this consolidation. Thereafter, a push back up to August highs, just above 3409, could happen.
Once that level is surpassed which I expect happens in the weeks to come, a strong push back to 3800 should get underway. Silver should move to $41-$42 into September and is equally, if not more attractive than Gold in the weeks to come.
Interestingly enough, DeMark ratio charts on GLD 0.88% vs. SPY 0.90% on a daily basis could form a 9-13-9 pattern by August expiration. This is an exhaustion signal, which I feel is typically quite positive and will be the first time this signal could appear following a four-month decline. (This latter chart is not shown below.)
The chart below highlights Spot Gold, illustrating what I believe is the final leg to this minor consolidation (shown in Red).
CFDs on Gold (USS/OZ)
Japanese Yen is close to turning higher, which should cause a decline to 136 in USD/JPY
Given the recent signs of both the US Dollar and the US Treasury yields starting to roll over, it’s important to pay close attention to the Japanese Yen and the potential for USD/JPY to also turn down and weaken back to new lows.
I feel this is forthcoming, and the Yen typically has a positive correlation with Gold.
While a 2-3 day bounce to 148.50-149 could be possible, it should be close to turning lower to test and break 146.62.
This would be quite bullish for the Yen (or as seen in this case below, quite negative for the prospects of USD/JPY.
I am expecting a coming test of Spring lows, which should ultimately be broken as the US Dollar falls into September.
U.S. Dollar / Japanese Yen
AAII reports show Bullish levels down to a three-month low
Incredibly enough, following a 33% SPX rally in the last 18 weeks, the retail-oriented AAII poll still shows persistent levels of bearishness.
In fact, the data which came out today, 8/14/25 showed 46.2% Bearish sentiment, vs. Bullish sentiment of 29.9%, or a whopping spread of over 16 percentage points in favor of the Bears.
While other Institutional gauges have begun to grow a bit more constructive, it seems that many on the Retail side might be increasingly favoring a poor back end of 2025 following our recent rally.
Despite the likelihood that September certainly could bring about some market weakness, this kind of pervasive bearishness dovetails precisely with what Tom Lee has discussed about this stock market rally being “the most hated rally”.
This level of Bulls has plummeted to a three-month low, indicating possible widespread concern over tariffs or how quickly the FOMC might begin lowering interest rates.
Overall, I find this sentiment to be quite positive from a contrarian point of view and feel that this level of negativity simply helps to embolden the “Bulls”. Furthermore, I feel that stock market consolidation in September very well could prove short-lived and not excessively damaging, technically, before a push back up to new record highs.
