In the Driver‘s Seat
S&P 500 gyrated in a wild daily range, putting in a daily upside reversal. In spite of the risk-on tunr in the credit markets, is that upswing to be trusted? Even if we do get the false hopes (and modest) rally into tomorrow‘s FOMC, Treasuries keep pointing lower still for now. And that would have consequences for corporate bonds as well – yesterday‘s relative resilience would turn out of fleeting nature. As a result, yesterday‘s tech upswing that wasn‘t followed to the same degree by value, would eventually give way to some more selling as the stock market bottom hasn‘t been reached yet (thus far, the selling has been rather orderly after the relief rally taking S&P 500 above 4,600 fizzled out).
Real assets were mixed, with crude oil and natgas obviously faring best. Some pressure on oil stocks and especially miners though remains – precious metals haven‘t decidedly turned the corner, and the hawkish Fed U-turn perhaps as far as into a dove, is still a few months away. Till then, till the real economy growth comes back into the spotlight (and inflation focus fades somewhat), we can count on rough sailing here, with silver and copper languishing (recent price action shows). If you approach it as a spread trade where paper assets are going to decline more than real ones (the preferable holdings and medium-term winners), you‘ll ride the tightening storm talked at length yesterday, fine.
There won’t be a regular analysis featuring charts or Twitter activities today, but I’m keeping a close eye on the markets and will issue a sound commentary whenever required by the markets on my watch.
Thank you for your patience.
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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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