S&P 500 continued the real FOMC move, which points down as befits tightening into slowing economy on simultaneous proclamations of strong banks. Short end of the yield curve didn‘t really budge yesterday, and the only factor beyond my AAPL earnings expectation allowing me to call for a modestly bullish Friday, was of technical nature.
Selling in bonds was slowly evaporating, and several key sectors I like to watch in connection with the 500-strong index, were nearing their logical supports without either showing willingness to break them. Bears won‘t have an easy day as the bearish implications of strong non-farm payrolls data are likely to be downplayed in favor of celebration that this lagging job market indicator doesn‘t show recession yet – and it‘s only USD and precious metals that started to notice.
Today‘s key level of distinguishing the bearish and bullish bias in stocks, is 4,128. It doesn‘t represent strong resistance, but would hint at where the unfolding Powell doubters‘ rally would reach.
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Let‘s move right into the charts (all courtesy of www.stockcharts.com).
S&P 500 and Nasdaq Outlook
Bears aren‘t having the upper hand today – the name of the game is whether 4,128 can be defended, or not. I‘m not counting with a close much below 4,115 today – there is still a lot of pent up bottom buying demand. As said, banking panic can‘t rule every day.
Credit Markets
The risk-off posture wouldn‘t last through today – bonds are to confirm the unfolding upswing.
Gold, Silver and Miners
Precious metals are to feel the heat with delay, last but not least through no fresh banking headlines, and money inflows into stocks (yes, that FOMO dip buying).
Crude Oil
Crude oil bottom pickers are here, but the move higher over the next week, would still be a crawl and not a jump. $75 wouldn‘t be conquered fast or easily.
Copper
Copper is holding up well actually – and for all the China activity data shows that the bets against Powell, the bets on the Fed getting forced to ease, are strong.
Related: The Elephant in the Room Is Continued Deposits Outflow