Where‘s The Beef?

S&P 500 embraced the dovish taper – $10bn a month pace gives the Fed quite a breathing room without having to revisit the decision unless markets force it to. The taper is as dovish as can be, with rate raising escaping attention. Talk of no rocking the boat, for the markets, economy and fiscal policy initiatives just can‘t do without. The more dovish scenario of my yesterday‘s presentation came true:

(…) So, how would the taper message be delivered, and could it go as far as $15bn a month asset purchase reduction while avoiding rate hike mentions as much as possible? Even if $15bn is indeed the announced figure, I‘m looking for the Fed to soften it before it can run its course, i.e. before 2H 2022 arrives – the economy isn‘t in such a great shape to take it, and the fresh spending bill (whatever the price tag), needs central bank‘s support too.

The initial reaction has been very positive in stocks, and overly weak in precious metals and commodities. The real assets downswings are though being reversed in line with my Tuesday‘s expectations – and in today‘s premarket tweets on the unfolding price moves.

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

S&P 500 and Nasdaq Outlook

S&P 500 and Nasdaq

S&P 500 rose without any brief disappointment – the top with capital t clearly isn‘t in, so don‘t think about standing in the bulls‘ way much.

Credit Markets


Universal risk-on move in the credit market continues, and the sectoral reaction to rising Treassury yields is a very positive one. Bonds and stocks are obviously seeing through the taper fog.

Gold, Silver and Miners

gold, HUI and silver

Gold was afraid of the hawkish outcome, which had zero real chance of happening – and miners spurted higher decisively first. Let‘s see the initial and misleading weakness in real assets being reversed, one by one – and silver do great again.

Crude Oil

crude oil

Crude oil has likewise flashed extraordinary weakness – one to be reversed with vengeance. The Fed can‘t print oil, and the energy crunch goes on as nothing has changed yesterday for black gold.



Copper gyrations don‘t change the fact the red metal is ready to swing higher next. Just wait for its reaction when broader strength returns to the CRB Index – we won‘t have to wait too long.

Bitcoin and Ethereum

Bitcoin and Ethereum

Bitcoin and Ethereum haven‘t been jubilant about the dovish news, but haven‘t come down beforehand either. Stabilization followed by slow grind higher is what‘s most likely next.


S&P 500 benefited the most from the taper message delivery, and the bulls keep having the upper hand – with increasing confirmation from the credit markets. The very initial reaction to taper announcement – namely its bearish anticipation – is indeed being reversed higher within commodities and precious metals. No tantrum, no rocking the boat – and asset prices are going to love that. Get ready for rising yields that would gradually stop underpinning the dollar – patience with the latter.

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