S&P 500 had a wild swings day, and didn‘t rise convincingly – credit markets didn‘t move correspondingly either. The upswing looks postponed unless fresh signs of broad weakness arrive. Yesterday‘s session didn‘t tell much either way – the countdown to the upswing materializing is on even though the tech didn‘t take advantage of higher bond prices. That can still come.

VIX through reversed to the downside, and the relatively calmer session we‘re likely going to experience today, would be consistent with a modest attempt for stocks to move higher. I‘m though not looking for a monstrous rally, even though we‘re trading closer to the lower end of the wide S&P 500 range for this year than to its upper border. The 4,280s are so far holding but as the Mar FOMC approaches, we‘re likely to see fresh turn south in the 500-strong index. For now, the talk of raising rates is on the back burner – Europe is in the spotlight.

Note that the flight to safety on rising tensions (Treasuries, gold, and oil up) didn‘t benefit the dollar. Coupled with the yields reprieve, that makes for further precious metals gains – the bull run won‘t be toppled if soothing news arrives. Likewise, crude oil isn‘t going to the tank below $90 and remains there. Commodities can be counted on to keep running – led by energy and agrifoods, with base metals (offering a helping hand to silver) in tow. As I wrote weeks ago, this is where the real gains are to be found.

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

S&P 500 and Nasdaq Outlook

S&P 500 volume moved a little up, meaning the buying interest is still there – convincing signs of a trend change are though yet not apparent. Should prices prove to have trouble breaking lower over the next 1-2 days, this could still turn out a good place for a little long position.

Credit Markets

HYG continues basing and keeps trading in a risk-off fashion, which is why I can‘t be wildly bullish stocks for now. Stock market gains are likely to remain subdued, noticeably subdued – as a bare minimum for today.

Gold, Silver, and Miners

Precious metals fireworks continue, but a little reprieve is developing – nothing though that would break the bull. The run is only starting and would continue through the rate-raising cycle.

Crude Oil

Crude oil is fairly well bid and doesn‘t appear to be really dipping any time soon. Oil stocks are preparing for an upswing and would remain one of the best performing S&P 500 sectors. Triple-digit oil is a question of time.

Copper

Copper‘s moment in the spotlight is approaching as commodities keep pushing higher, and base metals are breaking up. All of these factors are inflationary.

Bitcoin and Ethereum

Cryptos are attempting to move up today, and further gains are likely. I‘m looking for the 50-day moving average in Bitcoin (corresponding roughly to the mid-Feb lows in Ethereum) to prove an obstacle.

Summary

S&P 500 didn‘t break to new lows overnight and appears to be picking up somewhat today. The anticipated rebound might materialize later today and would require bond participation to be credible. I‘m not looking for sharp gains within this upswing though – the correction looks very much to have further to run. It‘s commodities and precious metals where the largest gains are to be made, with the European tensions taking the focus off inflation (momentarily). The pressure on the Fed to act decisively is though still on as various credit spreads tell – and the same goes for the compressed yield curve speaking volumes about the (precarious) state of the real economy.