S&P 500 faded the opening upswing, breaking below Monday‘s lows. High yield corporate bonds didn‘t surprise by at least closing unchanged, and neither did the quality debt instrument facilitate an upswing within tech or interest rate sensitive sectors such as utilities. In spite of the solid potential for an intraday rally attempt that could take stocks closer to 4500 again, none materialized.

The bears are taking a breather as evidenced by the VIX rejecting the upside move – but the volatility metric doesn‘t appear yet ready to roll over to the downside either. While the (mistaken) notion of cooling down CPI could have pushed stocks a little higher, markets appear more focused on the decelerating real economy, on the almost stagflationary atmosphere that‘s going to have stocks in its grip for the remainder of 2021:

(…) CPI coming in neither too hot, nor too cold, would be in line with my recent expectations of inflation becoming entrenched and elevated. Still, the figures support the transitory notion to a degree – the markets are obviously afraid of high inflation forcing Fed‘s mistake, and any reading that won‘t light the immediate inflation fires, would be considered good for the risk-on assets. More so probably for real ones as opposed to stocks. Finally, more time for the Fed to act implies better possibilities for precious metals bulls.

Let‘s move right into the charts.

S&P 500 and Nasdaq outlook

SPX

The bears retook initiative, making quite a progress when sectoral view is engaged. It doesn‘t mean though the sentiment can‘t flip bullish at short notice, except that there is none at the moment.

Credit markets

HYG

Credit markets turned risk-off, and unless HYG kicks in again, the stock market bulls can‘t think about crossing back above 4,500.

Gold, silver and miners

Gold

Gold embraced the retreating yields and wavering dollar, followed by miners and silver. The heavier than usual volume shows accumulation, but the bulls better arm themselves with patience.

Crude oil

WTIC

Crude oil hesitated yesterday, and oil stocks likely declined merely in sympathy with the stock market. Black gold‘s daily resilience can very well mean a broader commodity upswing is at hand.

Copper

Copper

Copper had been trading a bit too much at odds with the CRB, and remains prone to an upside reversal. I‘m not looking for the 50-day moving average to give in.

Bitcoin and Ethereum

BTCUSD

Bitcoin golden cross is here, and cryptos are likely to continue their measured rise. Crucially, Ethereum outperformance is still with us.

Summary

Risk taking – or should it be properly called „hedging“ – lit the fuse behind real assets as paper ones lag. While the dollar hasn‘t experienced much selling pressure yet in spite of retreating Treasury yields, its any modest decline is likely to be more than mirrored by the rising commodities, fitting well what one would look for in a slowing down economy with still rampant money printing.

All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

Feed news

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD: Bulls move in and eye 1.1750/60 targets

EUR/USD is on the verge of a bullish correction within what is otherwise a longer-term, bearish environment, The following is an analysis from a monthly and daily point of view.  From a longer-term perspective, the price is pressured within monthly low territories.

EUR/USD News

GBP/USD: Pressure mounts ahead of central banks’ announcements

The Fed and the BoE will make announcements this week. UK public inflation expectations are up for this year and the upcoming ones. GBP/USD is technically bearish in the near term, poised to retest August monthly low.

GBP/USD News

Gold: NY correction could lead to a run on $1,790

The price of gold continued to rise until the late morning of the US session. XAU/USD was capped at a high of $1,781.83 and drifted back in a correction of the bullish impulse to trade near $1,775 by the closing bell on Wall Street.

Gold News

Shiba Inu bulls can't hold SHIB from dropping to $0.000006

Shiba Inu price has fallen -28% over the past four trading sessions. Bears remain in control as bulls fail to complete a breakout above $0.000008. Bulls must hold $0.000007 to prevent a drop towards $0.000006.

Read more

Fed Preview: Three ways in which Powell could down the dollar, and none is the dot-plot

No taper now, but when? That is the main question for the Fed in its all-important September meeting. The bank buys $120B worth of bonds every month and it is set to reduce the pace at some point – the first step toward raising interest rates. 

Read more

Majors

Cryptocurrencies

Signatures