Bulls Getting Caught In The Whirlwind

Miners are not flashing outrageous underperformance, merely a modest daily one – the short-term fate of the precious metals upleg will be determined by long-dated Treasuries, copper and should the dollar (or USD/JPY) move, then through the contribution of fiat currencies. Even a brief comparison of the USD Index and the dollar-yen pair reveals though that risk-on is the prevailing move of 2021.

Crude oil was less hurt by all the selling yesterday, but should it break below $64 on a closing basis, $62 could very easily come next. The daily indicators have weakened, and the bulls don‘t appear ready to break above $66 next.

Cryptos are also in a wait-and-see mode, yet with noticeably less bearish undertones than black gold. Bitcoin remains choppy around its flat 50-day moving average, and should better return trading above it – no prodding by Ethereum though helps. The bulls are still taking a short-term break.

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

S&P 500 Outlook

S&P 500

S&P 500 suffered a sizable daily setback, and the recent consolidation‘s lows are likely to have to be defended next. Deceleration of the daily declines accompanied by a lower knot ideally would be the first sign that I would be looking for – alongside a positive turn in the credit markets.

Credit Markets

HYG, LQD and TLT

Corporate bonds showed no strength relative to long-dated Treasuries, and that doesn‘t bode well for today‘s session. High yield corporate bonds have though still been performing better in April than the two instruments represented by black lines on the above chart, which attests to risk-on being still the environment we‘re in.

Technology and Value

tech, NYFANG and value

Technology gave up all the gains since Thursday, and NYFANG broke below its rising blue support line, and the deterioration among the heavyweights continues. Besides tech, TSLA illustrates that eloquently just like ARKK. The rotation out of the behemoths is weighing down the index – this is the area where bleeding needs to stop.

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