Weekly Outlook - (07/07/2019 - 07/12/2019)

S&P continues to propel higher and gained about 50 points last week with futures trading as high as 3003 and VIX dropped by more than 10%. Last Friday, in-spite of the bullish jobs report, S&P declined by 32 points - why? Because short-term cycles were down (see below chart). And how did media explained the situation? Below is a quote from CNBC:

Stocks fall as strong jobs report dampens hopes of rate cut

S&P - 07/05/2019

Next week, in the early part, we may see some more weakness and consolidation until short-term cycles bottom. This should be followed by uptrend in later part of the week.

Our call for wave 4 in US Dollar turned out to be incorrect. US Dollar daily cycle (see below chart) proved us wrong and pushed dollar higher above its 200 DMA and daily trend level. It remains to be seen how far of the decline can US Dollar retrace in this corrective move. The interim resistance is at the weekly trend level <DXY_WT> and decisively clearing it will lead to re-test of the recent highs.

DXY Futures - 07/05/2019