S&P 500 declined, with tech holding up best – the volatility spike is here as real economy deceleration is joined by Evergrande fears. Both paper and real assets took it on the chin, and yields together with the dollar rose. As for greenback and Treasuries upcoming price path:

(…) Treasury yields moved up, but don‘t expect to see them gallop just yet. Slow and steady, orderly grind higher is the most likely trajectory ahead, and even that won‘t propel the dollar higher, or keep it really afloat. Greenback‘s support is at 91.70, and I‘m looking for it to give in over the nearest weeks, which carries tremendous implications for commodity and precious metals trades. And for risk assets in general.

Precious metals, copper and oil bore the brunt of souring sentiment, with cryptocurrencies joining in the slide later through the day. But have the material facts changed, or all we got was a whiff of risk-off? September is likely to be volatile, it seasonally is, and August had been a surprisingly calm month. You know what they say about periods of lower volatility giving way to those of higher readings… Time to buckle up.

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

S&P 500 and Nasdaq Outlook

The S&P 500 downswing was a value driven one. Risk-on has to wait for now.

Credit Markets

Credit market slide would have to stop before the stock market bulls can think about recovery – yesterday‘s picture gives a daily scare impression.

Gold, Silver and Miners

Higher yields and rush into the dollar did hurt precious metals, but I‘m not looking for a fresh and steep downleg to be starting here. When the momentary sense of panic calms down (it can happen relatively fast), precious metals would have an easier time rising on the monetary policy and inflation projections.

Crude Oil

Crude oil ran into another setback, but the buying interest bodes well – I‘m looking for a gradual price recovery to continue.

Copper

While copper is hurt by the weakening real economy and underperforming the CRB Index, commodities haven‘t rolled over to the downside – the commodities superbull remains intact. Copper bulls are bidding their time, and would likely step in on the heels of positive news out of China.

Bitcoin and Ethereum

Bitcoin looks to have found a temporary floor, but it would be very premature to declare a fresh upswing to be about to start – medium-term chart damage has been done.

Summary

Yesterday‘s risk-off day is likely to get at least partially reversed today, and I‘m not looking for it to break the stock market and commodity bull runs. As for precious metals and cryptos, I‘m looking for their recovery to start in earnest once the dollar and yields once again paint a favorable picture.