The eventful day I promised in S&P 500 and for risk taking arrived, and S&P 500 pressure to go higher was released via a one way rally. Indeed an eventful day with non-farm employment change (SME barometer) providing ample intraday opportunities to capture – together with some stock picks among discretionaries such as LULU that I had talked good seven days ago. That oil bounce having materialized right on cue, did wonders also for other real assets.

What‘s though most remarkable, isn‘t just the rally on underwhelming employment change, but the quick reversal of strong services PMI. I interpret that as cheering over corporate profits not being that badly hurt down the road, about demand not disappearing right now. Simply put, soft landing or resilient economy is better than stagflation supportive data or sharp recessionary turn. Let‘s not bring up Chicago PMI…

Today‘s unemployment claims won‘t rock the boat – it‘ll be a good opportunity for breadth to (try to) improve, and on my watch are chiefly Russell 2000 and financials.

To answer the opening question, it‘s this chart – and let‘s not leave out HYG, JNK or LQD.

(Click on image to enlarge)

Crude Oil

(Click on image to enlarge)

Quoting yesterday‘s analysis, oil is approaching extreme pricing levels, and while its woes aren‘t over (thanks to weakening economy and consumers feeling less affluent), we are to get a decent bounce this week that would help real assets and equities alike.

It‘s more than positive the rush to real assets allowed copper to reclaim another lately talked must-hold support of $3.55. Sugar has also risen sharply yesterday, which bodes well for the whole commodities complex – $.20 isn‘t that far away. 

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