S&P 500 couldn‘t keep the upswing to 4,365 during Powell‘s decent speech, and broke through 4,330 thereafter – not as a function of a stunning hawkish surprise (rising rates can be understood as reflection of still strong economy, sticky inflation and not tanking Q3 earnings), but of rising Mideast tensions – precisely said, of broadening the conflict.

While Israel needed more time to secure its northern border and West Bank, US Navy in Red sea intercepting missiles or US bases in Syria and Iraq under attack, that‘s a different cup of tea beyond Lebanon. Lack of a dead cat bounce coupled with poor DAX and strong gold and oil showing speaks clearly to rips being sold – and to be sold as part of weekend positioning.

Nasdaq is acting as a safe haven, but can‘t rally either, Russell 2000 saw sharp rejection of Tuesday‘s upswing, and yields (10y at 5%) are highlighting the deteriorating financial conditions. Stock market bottom (on these geopoliticals overpowering technicals with macro) before the advance to close the year on a bright note, hasn‘t yet been formed.

Stocks and Sectors

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NFLX and XLC are now candidates into whose strength to sell, rather than chase higher. The short-term downside has way more potential than the upside.

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Financials aren‘t yet a buy, and yesterday‘s upswing failure confirms this prospect as regards both big and regional banks. Financials are also to underperform.

Gold, Silver and Miners

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Gold and silver are to consolidate the high ground, with still bullish undertones. I take the last two daily candles‘ volume as one of accumulation – the time for a (significant) pullback isn‘t yet here. Unlike the days before, oil is today better positioned for gains than gold.

Crude Oil

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Crude oil is now ready for a bounce, with $86 – $87 serving as support. The flight into energy as safe haven (instead of TLT, charts are clear), is obvious, and about to lift the commodity somewhat more while copper is to remain barely above the $3.55 support.

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