S&P 500 made two good intraday returns but was overpowered by waning rotational strength and internal tech deterioration. Neither financials nor healthcare did their job too well – and when both precious metals and crypto start paying attention to rising yields and the dollar, the day is set to be a risk-off one.

The notion of manufacturing bottom being in is what can help stocks stem the developing selling pressure. Rising yields would though keep a lid on tech and many real assets – USD has very good prospects of breaking above 102 successfully. In today‘s session, the very optimistic and lagging indicator (GDP) boosting soft landing hopes as much as unemployment claims Thursday, would be checked thoroughly as the stock market advancing rank narrows.

This is quite apparent in gold already, so I made a cautionary intraday update – this is roughly what Trading Signals & Intraday Signals combo subscribers can expect if they trade also gold and oil intraday – more exclusive updates over Telegram, mail me if interested.

Returning to rate hikes and inflation, especially after the great oil run of late:

(…) Rate hikes aren‘t over, and we‘re in for return of inflation 2H 2023. That‘s though no issue for the stock market, which would still keep rising without a steep fall, driven by industrials, materials, energy, financials and many healthcare stocks – together with tech and discretionaries. Smallcaps and midcaps too as the theme is broadening of market breadth still. Communications aren‘t to be lagging as badly as e.g. staples either. That‘s for Q3 at least.

The Fed isn‘t to pivot – in current circumstances of real economy not falling apart, that would require a steep market drop, which is unlikely. Banking is gradually sorting itself out, deposit outflows aren‘t burning and commercial real estate (collateral deterioration) is still far away. The grind higher in stocks is clearly there, on more than a medium-term basis.

Way more stock market coverage incl. lessons from breadth and daily levels, follow in the rich chart section.

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

Gold, Silver, and Miners

Gold is getting a little ahead of itself even if it‘s as of Sunday the Dec contract that‘s being displayed. The sellers are on the move, target the (Oct contract) $1,960s at least.
 

Crude Oil

Crude oil consolidation is though coming on this risk-off day – nothing steep, $80 should hold with ease especially if manufacturing PMI continue its improvement. The lately heralded $82.50 resistance is holding, and would he a scene of larger battle.

Copper in the meantime will easily keep above $3.90s, perhaps even above $3.92 – base metals over gold, and they‘re led by copper.

More By This Author: