More SPY Downside, Tuesday
PPI above expectations – 0.3% as I predicted – made stocks move higher only to give up all premarket gains, and some. Rotations didn‘t disappoint me – they were weak. What was disappointing, is that the downswing didn‘t gather steam or proceed with nary a setback – instead, stocks were chopping during much of the day, and closed perplexingly on a brighter note, which might not be without consequences as the chart section shows.
The fact through remains that correction goes on, especially following the swift rejection of CPI spike, which also stopped bond yields retreating and instead made them rise. This risk-off that‘s nowhere near to its end (the 10y rebounded from 4% to close Friday at 4.16%, and is eyeing the low 4,30s with 4.33% being the prior top) would put more pressure on interest-rate sensitive growth stocks which won‘t be saved by rotations into value – financials and industrials with materials are muted, and not rescued by energy bucking the rising dollar.
Tuesday‘s retail sales or Empire State manufacturing aren‘t likely to surprise positively, with Wednesday‘s Fed minutes reinforcing the hawkish central bank realities (less than 20% odds of Sep hike is a major underappreciation of more tightening in the pipeline, but Fed would likely skip Sep in favor of Nov) and not supporting the market expectation of real economy accelerating from here. Add unemployment claims Thursday in line with expectations, and there is no stark bullish catalyst next week.
Instead, the consequences of BoJ yield curve adjustment will keep playing out including in the US Treasury markets:
(…) The rise in yields be it through Japan or the States, is to be (and is) reflected worldwide, from Gilts to Bunds. The 10y yield does not face any real 4.20% resistance, and as we can‘t talk about risks of deflation, there isn‘t any (geopolitical or other such as recessionary) catalyst to stop yields from rising.
In my comparison of this decade to the 1970s, this does not and would not prevent gold prices from rising (the $1,930 – $1,935 area in Dec contract is well defended, which translates into $1,905 – $1,910 spot gold. Similarly oil wouldn‘t stop rising after consolidating in my $83 area.
Keep enjoying the lively Twitter feed via keeping my tab open at all times (notifications on aren’t enough) – combine with subscribing to my Youtube channel, and of course Telegram that always delivers my extra intraday calls (head off to Twitter to talk to me there), but getting the key daily analytics right into your mailbox is the bedrock.
So, make sure you‘re signed up for the free newsletter and make use of both Twitter and Telegram – benefit and find out why I’m the most blocked market analyst and trader on Twitter.
Let‘s move right into the charts (all courtesy of www.stockcharts.com) – today‘s full scale article contains 4 of them.
S&P 500 and Nasdaq Outlook
4,492 – 4,495 are the „point of control“ area, overcoming which enables 4,515 but not much more than that. 4,535 wouldn‘t be beaten on a closing basis. I‘m looking rather at stocks approaching my 4,460 via 4,482 as the more likely scenario to play out latest Tuesday following economic data. The bias remains short and risk-off.
Gold, Silver and Miners
As said in the caption, gold is close to a bottom, and next week before the BRICS summit, is likely to start turning – but before that, wouldn‘t likely escape unscathed from rising yields (except for Monday) – $1930 – $1,935 in Dec gold may be still tested, but is likely to hold.. Silver in the $22.70 is at support, but may dip to $22.50 still.
Thank you for having read today‘s free analysis, which is a small part of my site‘s daily premium Monica’s Trading Signals covering all the markets you’re used to (stocks, bonds, gold, silver, miners, oil, copper, cryptos), and of the daily premium Monica’s Stock Signals presenting stocks and bonds only. Both publications feature real-time trade calls and intraday updates.
While at my site, you can subscribe to the free Monica‘s Insider Club for instant publishing notifications and other content useful for making your own trade moves.
Turn notifications on, and have my Twitter profile (tweets only) opened in a fresh tab so as not to miss a thing. Thanks for all your support that makes this great ride possible!
* * * * *
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.
Sign Up for Monica’s Insider Club!
It’s free and you’ll get my message right when a new post goes up.