S&P 500 bull couldn‘t extend gains on Monday, and credit markets don‘t look too optimistic. One more hooray before the bears take over? That‘s my working hypothesis. Whatever gains right after the open the bulls manage to achieve, would likely be reversed relatively fast – perhaps even later this session. I don‘t think the consumer confidence data would paint an optimistic picture – a picture that the market would react optimistically to said precisely. „Bad is the new good“- no, this mantra hasn‘t yet kicked in, and then diving to the yesterday discussed target, would take over. If you had been with me for quite a while already, you know that I was talking about early July as my leading scenario for a stock market bottom. So far so good.

Precious metals keep unsurprisingly going sideways, and commodities are having a good day today – the open oil positions are solidly in the black. Even copper is resilient on a daily basis, but I am not yet sounding the all-clear – more economic slowdown and disinflationary currents are underway, no matter how much bringing the inflation down sounds are overhyped. Cryptos' lackluster performance goes on, without much of a short-term chance of a turnaround on the horizon.

As stated yesterday:

(…) The big picture hasn‘t changed, and it‘s one of decreasing liquidity and the Fed is bound to surprise on the hawkish side down the road. That helps explain precious metals resilience (as always stated lately, that‘s gold and miners) while silver and especially copper bear the brunt of economic challenges. The red metals don‘t look to be done on the downside – contrasted with crude oil set to continue rising without much looking back, and natural gas having a very shallow, high-priced, and interesting summer „off-season“ – wonder what‘s in store for the winter prices (up, up). Agrifoods are setting up a nice entry point with corn having turned already, and wheat about to do the same. Cryptos would continue struggling, of course – it‘s quite impossible to be bullish there.

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

S&P 500 and Nasdaq Outlook

Troubled spot for the S&P 500 bulls – time is running out, and the credit market support is weakening. Time for some quick window dressing.
 

Credit Markets

The low volume behind the HYG downswing is the only thing to be „cheerful“ about. The bulls will be lucky if they don‘t get summarily rejected for $75, which probably translates into the stock rally not having all that much time left.