S&P 500 rebounded before GDP data, and most traders missed their key element, making the upswing doomed for economic reasons. You can have rate cut expectations going up on soft landing data, but if corporate profits are down -1.7%, where does that leave first stocks (E and P/E), and ultimately the job market?

Another thing is the GDP price index – while in line for Q1, its expectations for Q2 came in at 3.6% vs. 2% for the quarter before. That‘ll sure do wonders for disinflation, and upcoming monthly inflation data are to reflect that, very likely starting with the upcoming core PCE.

Correspondingly, stock market internals have changed, stagflation came back to the dictionary as I predicted Sunday would happen, and allowed for intraday opportunities capture. Where are the rotations while tech leads to the downside?

Let‘s move right into the charts (all courtesy of www.stockcharts.com).
 

Gold, Silver and Miners

As written yesterday, I firmly consider precious metals led by silver to turn out as the brightest spot in the coming days and weeks. Silver has carved out an inverted head and shoulders – I looked for the right shoulder to form way above $31.37 Jun contract area, which is not too different from the left shoulder, i.e. textbook and not reflecting immense silver strength under the surface if you look at Shanghai data.

It formed in the Asian trading hours today finally, and silver bulls can prove themselves by delivering a decent monthly close ideally nearer to $32 than $31 – all it takes is to withstand the sellers following core PCE today, and reasserting the buying on more hints of inflation making a return – this time combined with the „I see no stag“ element. They will.

More By This Author:

Yen Carry Trade Meets GDP
Steep Wall Of BoJ Worry
Climbing The Wall Of Worry