Very False Dawn, Really
S&P 500 indeed cratered, and bonds are starting to diverge – Treasuries are catching a bid in reflection of deteriorating real economy prospects while junk corporate bonds can‘t find a bottom just yet. The flight to safety as stocks decline left and right, is kicking in – the 500-strong index would likely break solidly below prior Thursday‘s lows. Meanwhile, the dollar topping process goes on, with any more meaningful TLT upswing sure to put more pressure on the greenback.
That would undepin the real assets instead of their going down during the days of heavy selling such as yesterday – even as demand destruction is kicking in. So are the supply constrainst as well still manifest – in the current mismatch, the resilience in CRB Index and select predictable pockets of strength such as energy and agrifoods, illustrates which way the scales are tipping. At the same time, precious metals (to be followed with a lag by base metals) would be an upside surprise of the year as the limited Fed tightening possibilities become evident during the summer – the real economy simply can‘t and won‘t be able to handle that. Market recognition of that moment is still more than a few weeks in the future.
For the week ahead, I‘m looking for current medium-term trends to continue, which means trouble in stocks and cryptos, and on and off real assets performance. It‘s too early to look for a lasting turnaround higher in any, with the exception of the most bullish of them all, energy. So, in light of the below announcement, the currently open positions won‘t likely need adjustments over the next 6 trading days.
In connection with the Nov 12, 2021 legal update on my homepage, the day of the key main hearing is approaching. Demanding event involving long travels – I won’t be able to provide any analyses or updates till May 29th, unfortunately. I want to thank my legal team at Gautier Law Firm for great ongoing cooperation. Looking forward for my return to covering the markets!
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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