The stock market continues to track the BAM Model as they chop lower toward the SPX 864 magnet.  I am expecting a sharp–but very short lived–bounce to unfold once they tap 864 but I’m also expecting them to fall apart after about 7:30am PST on Monday morning regardless of any counter-trend bounce and regardless of the level they’re trading at when we move into that time period.    

Crude continues to track the model as well and it ironic to me that the model seems to be telling us we’re about to repeat the 2008 experience with crude crashing, the HGX plunging to new all-time lows, and stocks breaking loose on the downside. 

I was wrong about the violent moves I forecast in June but as most of you know, my model is strict in its rule regarding the “pay me now or pay me later” dynamic.  In other words–this not the time to become complacent.

I hear people talking about a “quiet summer” with “range-bound” trading and I couldn’t disagree more.

Full report coming soon