Ready for More Hot Gold and Stocks Profits
One final attempt to go down before reversing to strong gains all the way to the closing bell – the S&P 500 returned to trading back at the upper border of its prolonged consolidation range. Again at 4,200, new ATHs are back in sight – that‘s at least what the impression from declining VIX says, and the option traders might disagree here all they want, they‘re likely to be the next cannon fodder in the bullish advance.
Needless to say that my reasonably and justifiably aggressive long positions in both S&P 500 and gold, are innundated with rising profits. Initiated in the vicinity of Tuesday‘s lows, I look for more gains in stocks (we‘ll get to the metals shortly) in spite of smallcaps still lagging behind (don‘t worry, they‘ll catch up over time, and I will cover that), and precisely because emerging markets are rejoicing over further dollar woes. Yes, the glitzy and fake tightening show is officially over since I first vocally called for it in Monday‘s analysis.
Keep an eye on the big picture presented yesterday:
(…) no change in the reflationary positive dynamics for stocks, let alone the red hot commodities. These (copper, agrifoods, base metals, lumber, oil) continue appreciating in spite of nominal yields pulling back a little these days. Make no mistake though, deflation isn‘t about to break out.
Lower yields finally coincided with (supported) the defensive sectors the way it ideally should – technology bottom searching is over, Dow Jones Industrial Average is spurting higher, utilities recovered, and consumer staples continued upwards as if nothing happened at all. Maybe is this heavy on P&G sector placing faith in the market leader‘s pricing power to result in a success once September arrives with the rest of crowd following? That‘s the part of the cost-push inflation I discussed on Monday. I truly hope that people are paying attention, and don‘t put all their eggs into e.g. the dollar basket when it comes to commodities:
(…) the USD Index … anticipated downside move … would help lift international markets, and is also part of the explanation behind the strong commodity performance these days. This CRB Index move is key, and shows how far have real assets progressed in shaking off the dollar link – if you compare the dollar‘s value in early Feb and now, you are looking at very meaningfully higher commodity prices over that same time period.
Gold and silver fireworks arrived, and more is to come! What a better proof than a broad based advance across the sector, starting with both metals, and extending to gold and silver miners left and right. Not to mention the copper fires burning brightly – if you were listening to my incessant red metal bullish calls, you‘re very happy now. And just as in the precious metals, there is more to come here too. So happy for all you who had the patience to wait out a couple of adverse sessions, because:
(…) The key metrics such as nominal or real yields support the precious metals rebound increasingly more – don‘t be fooled, gold would break above the $1,800 resistance, whether you look at it as a purely psychological one, or as a neckline of an inverse head and shoulders on the daily chart.
The advance across the real assets, the precious metals and commodities super bull, would be more well rounded then.
As for Bitcoin, such was my yesterday‘s (still valid) assessment in a series of updates of the leading, but currently lagging crypto when compared to Ethereum or Dogecoin, the latter being a true middle finger to the financial system. GameStop, silver squeeze, Doge…
Let‘s move right into the charts (all courtesy of www.stockcharts.com).
S&P 500 Outlook
Yesterday‘s rebound happened on rising volume, lending it credibility for the sessions to come. The bears weren‘t obviously convinced enough to sell as yesterday‘s volume lagged behind Tuesday‘s one.
Credit Markets
The corporate credit markets kept yesterday and still keep today signalling higher stock prices next. Notably, both HYG and LQD rose again in spite of long-dated Treasuries turning up as well.
Technology and Value
Technology did indeed bottom, and the heavyweights contributed reasonably enough to its advance. Semiconductors could have fared a little better, but that‘s not a major issue. At the same time, value stocks continued their steep ascent, as reliably as ever.
S&P 500 Market Breadth
The S&P 500 advance wasn‘t accompanied by either new highs new lows or the advance-decline line turning up noticeably. Might be disappointing at first sight, but the overall impression is still of a healthy and quite broad advance.
Gold and Miners Short-Term
Miners and gold are in tune with each other, jointly pulling the cart of the precious metals advance. No further words are necessary here, I believe.
Gold, Silver and Miners Long-Term
Just as strongly when I doubted the miners to gold plunge on Monday, the ratio swiftly recovered starting Tuesday and extending gains yesterday. Please note silver springing to leadership position again – gradually first, more obviously throughout this week on the silver squeeze heels, which would be a volatile ride, but once again, silver is the best of both worlds – the monetary and industrial applications ones.
Crude Oil
Crude oil pulled back a little yesterday, but the series of higher highs and higher lows since April hasn‘t been violated. The table remains set for further gains, and the only question is how fast these come – I‘m standing by my calls for at least $80 West Texas Intermediate before 2022 is over. Seasonality is still good for black gold, so enjoy the ride!
Summary
S&P 500 is readying another reach for the highs, finally supported (a ka not being hampered by) technology. Risk on is returning and high beta stock markets pockets are expected to keep doing well.
Gold, silver and miners have firmly positioned themselves to extend yesterday‘s much awaited and well deserved gains. The upleg is just getting started, now that the few weeks‘ consolidation is over.
Thank you for having read today‘s free analysis, which is available in full here at my homesite. Here, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for both Stock Trading Signals and Gold Trading Signals.
Thank you,
Monica Kingsley
Stock Trading Signals
Gold Trading Signals
www.monicakingsley.co
mk@monicakingsley.co
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All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.
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My best week ever! Thanks, Monica! You're the best!
Dear Sandra! I am very happy for you! I'm readying a surprise to be shortly announced on my homepage. Making it manageable on a daily basis (without much in terms of total content expansion), I'll be covering oil and Bitcoin too, with focus on trade calls & drawing upon earlier coverage and calls in this area. I'll keep finetuning as we go. Happy weekend!
You have a great weekend too, Monica! Please cover ETHE too. Made ATH – again – today, May 8.
Hello dear Sandra!
I'll make sure to talk $ETHUSD similarly to the way I talk silver and miners within the gold section. Please remember that I am the only one here, and I seek to make everything work out for the people & hit the ground running in a manageable and timely way in all the markets covered. I will be also keeping the daily mailings to a total of 2 (1st for the full daily analysis covering them all, 2nd for a joint overview in gold, oil and Bitcoin, where the individual market analyses would very well feature a one sentence "No change in market outlook or position details is justified", the way you've been used to till now when it comes to Gold Trading Signals arriving almost midway through the U.S. session), and will issue intraday updates (increasing the total mailings above the always 2 daily ones) only as regards position sizing or market moves updates (again to make it manageable & containing the meat and potatoes only, and again almost midway through the U.S. session – as usual, no alarm if it arrives this late = no change in the positions paragraph & I seek to bring you the one fresh and relevant update based on how the regular session is unfolding).
I'm really interested how it would be manageable live – it would invariably have to feel to be a series of tweets really, especially in the heat of market action. The emphasis is on a robust summary and swing trading style where I am as always ready to turn on a dime should anything smell or act fishy.
I would be taking turns at including oil and Bitcoin charts within Stock Trading Signals (the main and always first to be published analysis, and will be pointing to prior key daily analyses when issuing one or more sentencer updates, and the summary would newly have 4 brief paragraphs instead of the earlier 2. That's realistically the only way how to make it manageable – Stock Trading Signals will remain at the usual chart content size of 5-6 (max 7) charts per trading day no matter how many markets I would cover.
Talking which, once I settle in this daily flow (now that peace is breaking out I sincerely believe, and I won't need to devote more time to legal affairs bogging me down as we work out the spiritually correct ways to help each other instead – a key precondition of more productive efforts of mine in service of the people such as what I announced yesterday with the Oil Trading Signals and Bitcoin Trading Signals introduction, or what I am telegraphing now), next on my target list is to expand Gold Trading Signals into silver and miners signals too (I have to give more thought how to measure performance when it comes to futures and ETFs to keep them comparable – to be decided), Stock Trading Signals daily into Nasdaq (select sectors?) too (with $NDX coverage, it's easier when it comes to futures, with sectoral ETFs not so very much), and Bitcoin Trading Signals into Ethereum daily too.
We all have a great journey ahead!
Take care!
Everyone reading this, thank you and keep your feedback as to the unfolding changes coming…
That's awesome, Queen Monica!
Don’t make me blush, my oil and crypto angel! It was inspiration by you to turn whatever I’m doing on a 1:1 basis already into a formal structure (not that plenty wouldn’t remain still, or be next on the horizon). Take care!!
PS One more note – so as not to have comments all over the place, keep all your comments coming into the daily Stock Trading Signals please, whatever market you want to talk. It would be thus easier for everyone to locate what’s new all in one place per day. Thanks!
Patience is a virtue after all, I guess it has only started to pay back, cheers Monica and congrats
Dear Nabil, thank you very much – it indeed is, provided that the signs keep pointing your way, which was clearly the case this time around. I hope you benefited!
Am a bull ever since 13xx, my bet on being long based only on fundamentals, guess the real journey just commenced and for some years to come, best of luck Monica and thanks for your pro analysis
Hello Nabil, the long soft patch starting in Aug 2020, is over – and a new upleg here. As you say, the real journey, to which I add of this decade (commodities and precious metals super bull). Thank you very much!