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S&P 500 hasn‘t truly reversed yesterday – corrections are still to be bought, and the retreat in yields is especially helpful to tech as I wrote about extensively on Monday. The long end of the curve is in the stabilization with a bullish bias mode, putting pressure on the dollar, and no amount of hawkish assurances by Fed speakers has stood in the way. I‘m not afraid of the stalling value and cyclicals – healthcare looks ready to move higher again.
When it comes to retail sales and its effect on stocks, I‘m looking for the bulls to prevail in the end. The market breadth is still good, and VIX conducive to further gains after some trepidation. As 4,010s have been broken, 3,973 is likely to hold (if anything, 3,958 is waiting in the wings). The daily outlook is for relatively narrow range with an upward bias for prices.
And that translates into precious metals as well, where $1,752 is the first support for gold, and silver ready to defend the $22 handle, which means that gold wouldn‘t really swing below $1,765 (not even theoretically) let alone give up much of intraday gains today – I‘m looking for crude oil to join and return back above $87.50 while copper does away with at least a third of its premarket downswing. Meanwhile, the crypto fallout continues, with Ethereum getting into headlines…
One wish for today? Some daily steepening of the yield curve, of the 10-year over 2-year.
Keep enjoying the lively Twitter feed serving you all already in, which comes on top of getting the key daily analytics right into your mailbox. Plenty gets addressed there, but the analyses (whether short or long format, depending on market action) over email are the bedrock, so make sure you‘re signed up for the free newsletter and that you have Twitter notifications turned on so as not to miss any tweets or replies intraday.
Let‘s move right into the charts (all courtesy of www.stockcharts.com).
S&P 500 and Nasdaq Outlook
As long as we keep above the above mentioned supports, S&P 500 with Nasdaq are poised to extend gains throughout this week. - the path of least resistance is still up, and 4,040 will be overcome.
Credit Markets
Still risk-on, no warning sign in bonds – the retreat in long-dated yields is indeed continuing this week, and would continue over the nearest weeks as well.
Gold, Silver and Miners
This has been and still is a very bullish chart, one that got confirmed with a powerful upswing that‘s not about to pause much. Precious metals are to enjoy the weakening dollar as much as commodities, with silver learding gold.
