The immediate trend didn’t change too dramatically for $SPX on Wednesday, and this reduced daily trading range and lesser volume suggests many aren’t anxious to put on much risk ahead of Friday’s Jackson Hole speech. Near-term trends remain bearish and didn’t change by Wednesday’s close. Over the next week into end of month, upside should be limited to 4220 while downside support is found near 4095-4100, and then 4022. While one cannot rule out a bit more downside, it’s thought that interest rates likely reverse after Friday, and this should prove to be a key technical catalyst for stock indices to push higher into September.
Copper looks to be beginning a meaningful move higher
One interesting dynamic that’s been happening lately concerns Copper’s meaningful lift off July lows despite economic data that’s been less than stellar.
Technically this move looks bullish and should help Copper push up to near 380-386 in the near-term. Then, following a minor pullback in September, I expect a much more meaningful rally which should test Spring 2022 highs.
Wave structure and cycles both look like constructive technical factors which can help this rally extend into late December 2022.
Overall, I like positioning long in Copper and would consider buying Freeport McMoran $FCX on dips into late September for a better than average chance of a rally in the months ahead.
While precious metals still look to have some work to do ahead of rallies, Copper is looking more bullish and might be the metal to favor for a more meaningful move into year-end.
As hourly Copper charts show below, prices stalled out right near Copper’s 38.2% Fibonacci retracement of the high to low range in recent months. I expect that the 50% retracement area is now reachable, and like positioning long in Copper.
Copper cycles also point higher into end of year
Copper cycles seem to be confirming that our lift-off July lows might have been an important one. When running cycles on Copper going back over the last five years, the same upward swing that coincided with peaks in Spring 2021 and Spring of 2022 also look to be turning back up now and remain elevated until January 2023.
Thus, a bullish technical forecast looks probable for Copper between now and year-end. One should consider owning Copper and the various stocks that correlate closely with it, along with ETF’s.
Uranium finally gets its much-needed catalyst
Wednesday’s surge in Uranium happened following Japanese Prime Minister Fumio Kishida’s comments about the government planning to start more idled nuclear plants and exploring the development and construction of next-generation reactors.
This looks like a huge policy shift following nearly a decade after the Fukushima disaster. Kishida discussed restarting seven more nuclear reactors by next Summer which could amount to about half of Japan’s total operable units (17 of 33).
Most of the Uranium space traded up sharply on Wednesday amidst very heavy volume. I had discussed this space technically earlier this year
Cameco ($CCJ) (Canada) is the largest company involved in the exploration, mining, milling and purchase of Uranium concentrate which could benefit by such a move. ETF’s involved in the space such as $URNM, the Sprotts Uranium Miners ETF, or the Sprotts Uranium Physical Trust, $SRUUF, both look to be interesting candidates to consider as well. $URNM, shown below, spiked to new weekly highs Wednesday and volume expanded aggressively on this rally. Additional strength looks likely up to $88 initially, and then following consolidation, I expect this to move back to new highs for 2022.