After Monday‘s great rise, stocks continued without much of a pause yesterday too. Did they get ahead of themselves, or not really? And what about those correction calls, is the alarm over now? As said yesterday, the bulk of the correction in stocks is over.

Is it clear skies ahead now? In my very first 2021 analysis 10 days ago, I‘ve called for a not so rosy February ahead. Last Friday, options expired with stocks taking a plunge, so the current month will get an optical boost. I am looking for higher prices, and no correction around the corner.

Gold is in a different situation, still basing and unable to keep intraday gains. Having predictably given up the silver short squeeze boost, the search for the local bottom in largely sideways price action continues. That‘s likely to be the case given that the dollar has stabilized and is peeking higher (before eventually moving to new lows, is still my call).

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

S&P 500 Outlook

The daily S&P 500 chart looks bullish at first glance – that‘s the V-shape rebound effect. The volume though isn‘t the greatest really. But what about yesterday‘s upper knot though? It looks to me we‘re in for a period of gains digestion.

Credit Markets

High yield corporate bonds to short-term Treasuries (HYG:SHY) relative to the S&P 500 (black line) posture improved, and no dissonance to speak of remains.

The 3-month Treasuries though haven‘t relented much, and remain well bid. There is not much willingness in the market place to push short-term yields higher, and that‘s a short-term sign of caution.

S&P 500 Sectoral Peek

Technology (XLK ETF) has recovered, and gapped higher on quite low volume. Approaching its Jan highs, it‘s not though optically in the strongest position, and would do best if it were able to maintain gained ground.