Yesterday, S&P 500 initially tumbled on economic data supporting the notion that the economy isn‘t falling apart equals Fed has room to raise by that two more 25bp this year, keep shrinking its balance sheet, and remain restrictive. Following through on prior solid breadth, the dip got bought within hours. Slow grind-up is still the name of the game.

That was my call at the onset of the European session, nothing bearish premarket – as the core PCE draws near, this anticipation had been fulfilled. As I don‘t expect a hot inflation figure (this is Fed‘s probably favorite core figure) – rather 0.3% month on month at most – this should work to ultimately let stocks overcome any initial gyration with ES move to the upside, helping real assets and weakening USD.

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

S&P 500 and Nasdaq Outlook

4,432 as nearest support should hold, and 4,415 wouldn‘t come near today. My expectation is that the initial dip (if any to speak of) would get bought, and it would be up to XLK, XLC and XLY to kick in and support the usual XLE, XLI, XLB and IWM with a push to 4,455 and likely breaking it on a closing basis.
 

Gold, Silver, and Miners

Miners moved nicely yesterday, and gold with silver can surprise following today‘s PCE data. Too early to look for a turning point and new sustainable upleg though.

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