S&P 500 rally didn‘t catch second breath before the closing bell, and bonds aren‘t favoring it to continue. There is no risk-on constellation anymore, and the broad selloff on growth slash recession worries, has driven both oil and copper down from their botom searching patterns. Treasuries are also demanding more action from the Fed, and the central bank would oblige. I expect Powell to downplay the effects on real economy. Not good, and the speed of recent price action – especially when the failure to gain similar traction to stocks in recent days – is considered. Precious metals are to keep up best, and I mean gold and miners here. Cryptos and economically sensitive commodities are to remain under pressure, and the failure of oil to put in a floor yesterday, is worrying. Gotta respect the price action even though black gold hasn‘t peaked, and a much bigger crisis is brewing – one not to be solved with some gas tax holidays.
For the full macro details, please check yesterday‘s extensive analysis if you haven‘t done so already.
Let‘s move right into the charts.
S&P 500 and Nasdaq outlook
Today‘s closing prices would reveal sharp and ongoing deterioration. The reprieve is over after a few measly days.
Setting the tone, setting the tone – and it‘s one of shrinking liquidity – but the turn in long- dated Treasuries higher, is approaching. It‘ll be in recognition of darkening economic prospects.
Gold, silver and miners
Precious metals sector would hold up best, gold with miners look cushioned against further declines. Namely given the following charts‘ posture.
Crude oil had the hallmarks of a local bottom, and given that it‘s not holding in today‘s trading, the Powell testimony is likely to add to the short-term pressure regardless of China being hungry for more black gold.
For many weeks, I had the greatest reservations about copper, and its chart posture has turned ugly. I don‘t see the Fed pivoting yet, or markets moderating their downswings in anticipation thereof.
Bitcoin and Ethereum
This bottom searching isn‘t over, and cryptos are likely to keep declining, which has been in line with one of my calls of late.
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.