S&P 500 continued extending gains no matter the sectoral non-confirmations – the momentum from bonds had been enough as telegraphed both in yesterday‘s analysis and intraday updates (pointing to increasingly thin air up there in this liquidity based rally). The appropriate view is to compare the underperforming stock market rally meeting deteriorating earnings first, against outsized gains in precious metals and commodities.
Before the core PCE report, we got plenty of chop indeed. The eurozone headline vs. core inflation data have been favorable to the bearish stocks thesis (explained in the linked to thread). The figure came in slightly below expectations, by a miserable 0.1% year on year, which is hardly enough to dissuade the Fed from tightening. No real fireworks – today or Monday.
Crude oil is to lead today higher, followed by silver. Not expecting daily miracles from copper, and gold would continue treading at $2,000 still, all of which has risk-off undertones. Undertones – it‘s not enough to send stocks into daily decline. The daily outlook continues being ever so slightly but still bullish.
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Let‘s move right into the charts.
S&P 500 and Nasdaq outlook
4,039 won‘t again come into jeopardy (and neither will 4,015 as the going won‘t get really tough in the core PCE aftermath either). Liquidity is still lifting this boat for now. It doesn‘t matter when exactly 4,115 target would be reached, but on what kind of non-confirmations (if reached at all – it‘s hard to time when tech starts gasping for breath).
Bonds aren‘t to turn risk-off today, and would pose no obstacle to the stock market bulls. The short end of the curve should act reserved about today‘s data, and long end would continue drifting very slowly higher.
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.
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