Not Passing Smell Test

S&P 500 tech driven upswing makes the advance a bit suspect, and prone to consolidation. I would have expected value to kick in to a much greater degree given the risk-on posture in the credit markets. The steep downswing in commodities and precious metals doesn‘t pass the smell test for me – just as there were little cracks in the dam warning of short-term vulnerability at the onset of yesterday, the same way there are signs of the resulting downswing being overdone now.

And that has consequences for the multitude of open positions – the PMs and commodities super bull runs are on, and the geopolitics still support the notion of the next spike.

Let‘s move right into the charts.

S&P 500 and Nasdaq Outlook

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S&P 500 and Nasdaq

S&P 500 turned around, and the volume isn‘t raising too many eyebrows. However, the bulls should have tempered price appreciation expectations, to put it politely…

Credit Markets

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HYG turned around, but isn‘t entirely convincing yet. We saw an encouraging first step towards risk-on turn that requires that the moves continue, which is unlikely today – CPI is here, and unlikely to disappoint the inflationistas.

Gold, Silver and Miners

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gold, silver and miners

Precious metals downswing looks clearly overdone, and I continue calling for a shallow, $1,980 – $2,000 range consolidation next. This gives you an idea not to expect steep silver discounts either. Miner are clear, and holding up nicely.

Crude Oil

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crude oil

Crude oil downswing came, arguably way too steep one. Even oil stocks turned down in spite of the S&P 500 upswing, which is odd. I‘m looking for gradual reversal of yesterday‘s weakness in both.


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Copper has made one of its odd moves on par with the late Jan long red candle one – I‘m looking for the weakness to be reversed, and not only in the red metal but within commodities as such.

Bitcoin and Ethereum

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Bitcoin and Ethereum

Cryptos are giving up yesterday‘s upswing – they are dialing back the risk-on turn and rush out of the safe havens of late.


The S&P 500 dog indeed just had its day, but the price appreciation prospects are not looking too bright for today. With attention turning to CPI, and yesterday‘s „hail mary decline aka I don‘t need you anymore“ in the safe havens of late (precious metals, crude oil, wheat, and the dollar to name just a few) getting proper scrutiny, I‘m looking for gradual return to strength in all things real (real assets) – it‘s my reasonable assumption that the markets won‘t get surprised by an overwhelmingly positive headline from Eastern Europe at this point. Focusing on the underlying fundamentals and charts, I don‘t think so we have seen the real asset tops – precious metals are likely to do great on the continued inflation turning into stagflation (GDP growth figures being downgraded), and commodities are set to further benefit from geopolitics (among much else).

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