That Slow Grind

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 chops indeed. The eurozone headline vs. core inflation data has been favorable to the bearish stocks thesis (explained in the linked 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 trading 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 to be ever so slightly but still bullish.

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Let‘s move right into the charts (all courtesy of

S&P 500 and Nasdaq Outlook

S&P 500 and Nasdaq

4,039 won‘t again come into jeopardy (and neither will 4,015 as the going won‘t get 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).

Credit Markets


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 the long end would continue drifting very slowly higher.

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