|

Beginning of the end, or end of the beginning

S&P 500 made up its mind very fast following the strong NFPs beat – and we as traders and investors timing the markets have no other better choice than to go with correct interpretation of incoming data, and the renewed macro / fundamental push these mean – I made it clear how to win no matter what in this video recorded Friday midsession (with prior calls on precious metals recovering from hits hits fast, and oil barely swinging lower intraday, were filled too).

Note inside watching how and why I called for stock prices to close near the intraday lows – what else these can do given the institutional positioning? What else is the big money looking for as safe returns as possible (you seen me and heard me talking many times the equity risk premium concept) go given the inexorable march of yields higher, which was again one of the first charts I featured in this Jan 01 video (incl. the 5% breakout on 10y soon – we‘re almost there already).

The bond market competition for equities is stark and getting stronger – and data such as Friday‘s NFPs (highlighting decreasing justification for the Fed to cut as per lofty expectations dating back to Sep 50bp emergency-feeling cut) further strengthen by not everything being rosy in the consumer land as per UoM consumer sentiment and inflation expectations, only highlights the risk of equities getting their Wile E. Coyotte moment(s) of getting doubts over earnings growth rate expectations, i.e. lofty valuations. Here and there, with force such as Friday.

Also, it‘s been weeks since I started complaining about first bearish divergencies, then outright negative readings in market breadth indicators (aka which sector is truly leading? Financials, tech, software at least?) - and now we have volume picking up and intraday rebounds (predictably) failing – and sooner rather than later, at that.

Looking at real assets, precious metals and commodities, it must be said (and I said so lately) that agrifoods got fine companions, there is relative strength emerging, and that‘s sending fine signals about market positioning/fears going into PPI and CPI (Tuesday and Wednesday).

These and more thoughts I shared Saturday with you in yet another video about the equities prospects accounting for yields, dollar and the pre-inauguration time – you remember my call back in Nov for a weak SPY start to 2025 (those poor Jan-Feb times for bulls, put mildly, and correction, put succintly).

Thinking that Bitcoin holds above $92K? I can‘t be yet that certain and doubted resiliency expectations on the weekend – backtesting the low $70K area is still within the realm of possibilities no matter how well cryptos are holding for now, still. Check the Sunday chart, and then Monday premarket.

Chart
Chart
Chart
Chart
Chart

Author

Monica Kingsley

Monica Kingsley

Monicakingsley

Monica Kingsley is a trader and financial analyst serving countless investors and traders since Feb 2020.

More from Monica Kingsley
Share:

Editor's Picks

GBP/USD declines as market caution lifts US Dollar

GBP/USD extends its gains for the second successive day, trading around 1.3200 during the Asian hours on Wednesday. The currency pair depreciated as the US Dollar gained momentum, driven by a combination of robust domestic economic data and a complex, mixed geopolitical landscape.

EUR/USD weakens below 1.1400 as Fed hike bets lift US Dollar

The EUR/USD pair trades on a negative note near 1.1380 during the early Asian trading hours on Wednesday. The major pair extends the decline as traders continue to assess the developments surrounding the US-Iran peace deal.

$4,050: Gold dives to fresh two-week low as Fed rate hike bets boost US Dollar

Gold drifts lower for the second straight day – also marking the fifth day of a negative move in the previous six – and drops to a nearly two-week low during the Asian session on Wednesday. Despite easing inflationary concerns in the face of the recent fall in Crude Oil prices, traders have been pricing in a greater chance of a rate hike by the US Federal Reserve. 

Bitcoin under pressure, Ethereum loses key support, XRP momentum weakens

Bitcoin, Ethereum and Ripple remain under pressure on Wednesday after falling slightly the previous day. BTC trades below $63,000, ETH slips below $1,700, while XRP momentum continues to weaken. The deteriorating price action in these top three cryptocurrencies suggests a potential continuation of the near-term correction.

"Rearranging the deckchairs on the Titanic": UK's fiscal crisis outlasts another Prime Minister

Keir Starmer's resignation as the UK Prime Minister comes ten years after the Brexit referendum vote, a coincidence that financial markets have been quick to note. The British Pound trades around 1.3220 against the US Dollar on Thursday.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.