Are S&P 500 And Precious Metals Bears Just Getting Started?

Scary selling yesterday? See how little the downswing has achieved technically, check out the other characteristics, and you‘ll probably reach the same conclusion I did. It‘s still about the tech getting its act together while much of the rest of the market is doing quite fine.

The credit market confirms, as is obvious from the HYG:SHY ratio chart I‘m showing you. True, long-term Treasuries are under pressure, but I wrote on Monday that not even considerably higher rates would break the bulls‘ back. The dollar isn‘t getting far, and given tomorrow‘s non-farm payrolls, which are expected to be rather bad… Check instead another chart I am featuring today, and that‘s volatility – this correction appears in its latter stages as the crash callers „now, this quarter, whenever because it‘s allegedly overdue“, will be again surprised and backtracking in tone once the market gets what it wants: more liquidity.

That was stocks, what about gold? No shortage of gloomy charts there, accompanied by various calls for a local bottom. The most bullish one (me included, talks about a possible bottom being made here, with the $1,700 to $1,690 zone able to stop the downside. I am though also raising the lower border of the Apr-May 2020 consolidation, which is around $1,670, as even stronger support (over $40 lower than the above one) than the volume profile based one we‘re still at currently – and based on different tools, I am far from alone. The doomsayers‘ scary clickbaitish targets of $1,500 or $1,350 are in the minority, and about as helpful as calls for $100 silver before years‘ end.

As I always say, let‘s be realistic, honest, and act with real integrity. People deserve better than to be played around through fear or greed.

Silver remains in a solid uptrend, and so does platinum. Regardless of today‘s premarket downswing taking copper over 4% down as we speak, commodities are happily running higher in the face of „no inflation here, move along“ calls. How far is the Fed announcing yield curve control, or at least a twist program? Markets crave more intervention, and those calling for rate hikes to materialize soon, are landing with egg on their faces – mark my words, the Fed is going to stay accommodative longer than generally anticipated – have we learned nothing from the Yellen Fed?

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Monica Kingsley 1 month ago Author's comment

Just when I am writing above that the market needs liquidity, action, and lay out the Fed possibilities, Powell disappoints – and we have a hissy fit. No new measures were hinted at – Treasuries on the long end turned lower, and pretty much everything else except oil, in a kneejerk reaction. Dollar is up on the inaction, and that quite explains what we're seeing…

The question is when will the Fed relent? End of 2018, anyone?

Monica Kingsley 1 month ago Author's comment

Here we go with the progress update 90min since the open:

intial selling pressure in stocks repelled, HYG undecided on a daily basis, through bond markets remain constructive. When will gold notice? Silver again making a recovery run, just as copper.

Who saw the great run in oil coming? I'm an oil bull as well, and featured an oil analysis in my yesterday's article - great to see the bullish conclusion confirmed this soon!

I hope you benefited :)