Winning the day
|S&P 500 closed on a fine note, and keeps nibbing at 4,040 – the great resistance that will ultimately fall (likely early next week). Running the stops before that, but key sectoral performance indicates that it would be only weak hand that would be shaken out.
If the sellers had any chance to push through, it was this week – and the final opportunity to do so this year, is to evaporate once the second week of Dec gets out of the way. The outside markets aren‘t hinting at much success for the bears – bonds remain risk-on, USD not throwing a spanner in the works… 10y over 2y yield relenting together with 3m yield going down, that would be most constructive for the bulls – still absent for now, and that‘s why this Q4 rally will fail in Q1 2023.
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Let‘s move right into the charts.
S&P 500 and Nasdaq outlook
The chart is still strong, and 3,958 shouldn‘t really come into danger – the time is to gather strength for the final 2-3 weeks of this year, and to run (higher). 4,040 getting out of the way, determines the speed and path of the upswing. 4,010s is the first line of support.
Credit markets
The retreat in yields and general risk-on posture in bonds will continue even as today‘s premarket progress has been reversed, and then some. Bonds haven‘t peaked, and neither have cyclicals or tech within this bear market rally in stocks.
Gold, Silver and miners
Precious metals surely give an appearance of the lows being in, and now are in the process of making higher highs and higher lows. Note the often written about decreasing sensitivity to rate hikes and at times hawkish rhetoric – economic slowdown with dollar getting challenged, that‘s an elixir that copper also likes
Crude Oil
Oil bulls better clear back above $80 again, but the short-term chart technicals look slated against. I‘m willing to sit out the setback - while combined with precious metals, copper and stocks, this portfolio should win the day together.
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