Tips to the rescue

S&P 500 and Nasdaq positioning for TSM earnings that I extensively telegraphed in full in yesterday‘s article (the opportunity smelled smashing) and also on Twitter, came true with strong beats. The positioning run continued, and the soft patch was cured by a TIPS auction leading as well to improvement in S&P 500 breadth. The defensive positioning was gone, and tech was accompanied by communications, discretionaries and materials to the upside.

Gold likewise continued higher off my $2,005 bottom call. Asset prices welcomed both Philly Fed manufacturing and building permits (unemployment claims below expectations favored though no landing scenario, which was ultimately disregarded by market action) – and ignored the daily rise in yields taking 10y rate all the way to 4.17%.

Another yesterday repeated call – for USD to face stiff resistance at 103.50 – keeps holding. It looks like there is a limit to how much steam can be let off via the hawkish talk when all met in Davos.

All in all, another great day in our channel – opportunity to ride the momentum that turned out strong, and every intraday dip was bought – patient swing traders would though prefer a bit deeper dip than the market offered yesterday. Still, Mar rate cut probabilities went from 51.9% to 53.8%, which is a notable result given the current yields pressure, and that points to dips being relatively shallow today and next (opex expiry today as talked earlier in the week). More important is the fact that uptrend was reestablished following last Friday‘s selling into very good PPI number.

More preview from our channel as regards grabbing very short-term opportunities and shallow dip indications (long NDX gains locked in).

Let‘s move right into the charts – today‘s full scale article contains 2 of them, featuring precious metals and oil.

Gold, Silver and Miners

The caption says it all - gold bias keeps being bullish since the bottom call, but careful about greater than $7 downswings, protect your open gains accordingly.