What’s the reversal shelf life
Unlike the week before, S&P 500 had distinct trouble overcoming the bearish Sunday gap, yet helped mightily by XLY (discretionaries out of all stock sectors, sure I‘m fine with TSLA rising, but is the job market really on the mend, or the Fed cutting soon? There is still backburner tariff uncerrtainty, but recession nowhere near as I argue in Sunday‘s extensive article) to reverse from due selling in the opening half of the regular session.
Part of it can be attributed to perceived Mideast tensions easing, and hours later came the official ceasefire announcement. I hadn‘t been expecting it to be duly observed, and Trump already complained about both sides violating it.
Yet, markets took the optimistic message, and ran with it – such is the degree of headline sensitivity – coupled with Hormuz closure implicit threat removed for the time being, sending oil sharply down, forming a trap for late buyers as called. The move is serious as it cut through $70, stopping at t he 200-day moving average. Gold also gave up Monday‘s gains, just silver in a (correctly in commodities perceived, for all the inflation uncertainty reasons) risk-on turn rose, with copper manifesting that relief even clearer. Commodities truly are in no way a breaking down patter, regardless of upcoming yields path.
So, will S&P 500 keep up Monday‘s gains as second day follow through tendency would seem to historically suggest?
Author
Monica Kingsley
Monicakingsley
Monica Kingsley is a trader and financial analyst serving countless investors and traders since Feb 2020.
