Energy, Crude should be buyable by late August

$SPX continues to show resilience despite the plethora of bad news, and Monday’s minor early pullback was greeted with buying yet again.  $SPX looks to have upside of around 1-1.5% into mid-September, while downside could shed 5% into early October.  Thus, risk/reward is starting to look poor for those with timeframes of 6 to 8 weeks or less.  China’s surprise rate cut looks to have directly led to a rolling over in Commodities, and this looks to be something which could lead to further weakness in Energy and Materials in the back half of August.  The hourly Elliott-wave count seems to suggest prices are nearing at least a minor peak.  Yet, downside likely proves minor in August down to $SPX 4100 while a larger decline to 3850-3900 might occur sometime in September which aligns with the worst period of Market weakness during most Mid-term Election years.  Overall, 4258 looks to be the first key area of support on any decline, but until breached, trends remain stretched, but resilient.  The switch to more defensive themes looks important to keep an eye on, but at present, prices are still pushing higher.

WTI Crude breakdown to new six-month lows keeps near-term trend pointing lower   

Brief undercut of August lows reached the lowest levels since late January for WTI Crude.

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