Snowball‘s Chance in Hell
S&P 500 duly plunged, and the risk-on turn that I wrote off on the spot, is over faster than anyone can say Jack Robinson. Tech continues flirting with disaster, and value isn‘t at its strongest either. Recognition of the tightening reality goes on, and is hitting hard. Bond yields continue rising, and so do inflation expectations. Markets are hard at work, running ahead of the Fed in tightening, with the dollar in steep ascent naturally as well. The bulls are easily slaughtered in such conditions, and I‘m looking for another day of selling pressure across the board. Non-farm payrolls would show some slowdown in the real economy, over time delivering another blow to risk-on positioning when initial bets on Fed „doing something“ / the economy can stand on its own into the future, fall on deaf ears, and recognition of the tightening reality returns.
Precious metals aren‘t out of the short-term woods, and remain vulnerable (less so than copper) to a brief takedown, which isn‘t however a foregone conclusion. Gold would remain sturdier than silver – but even the yellow metal isn‘t immune. As stated so often lately, the best place in real assets to ride all the tightening out, is in energy. Crude oil and natgas would continue shining out – contrast that with more downside ahead in cryptos. The table is set clearly in currencies as well – the dollar hasn‘t topped (neither have yields), and both euro and yen hard times would go on for quite a while longer. The open profits would grow fastest in stocks, cryptos and oil – precious metals and copper would require most patience, but will be richly rewarded when sniffing out the coming Fed turn and growth worries outweighing inflation concerns. Yields topping would be a first sign that monetary policy shift is knocking on the door.
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, and have a nice weekend.
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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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