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Technical Report for the Week of 03/14/22

Technical Summary


Equities – A higher-low pattern in the SPX Index, coinciding with 4,115.65-4,157.87 (2/24 and 3/8/22 lows), hints at a potential near-term bottom. However, a 2-plus year downtrend channel at 3,963 and 4,412, coupled with a death cross sell signal (50-day ma crossing below 200-day ma), and a recent gap-down (3/11/22), warns of further volatility. Key initial resistance is 4,383.5-4,417 (the 31.8% retracement from 1/4/22 to 2/24/22 decline, 3/3/22 reaction high, and the Jan 2022 downtrend) and above this to 4,467-4,476 (200-day/50-day ma and the 50% retracement). Below 4,114.5-4,157.87 warns of the next SPX downturn toward 4,057 (5/12/21 low), and below this to 3,963 (bottom of Jan 2022 downtrend channel).

Fixed Income – The 10-year minus 3-mo yield spread found key support at 1.40-1.44 (200-day ma and Aug 2021 uptrend). Above 1.71-1.73 signals steepening and rally to 2.09 (12/16 high). The long-end, medium, and short-end yields have broken out earlier in anticipation of the Fed’s March rate hikes. The recent consolidations may trigger the next sustainable rallies. TNX is nearing the top of the Jul 2021 uptrend channel at 2.065-2.16%. The breakout suggests 2.4-2.78%. Initial support is 1.836%, 1.68-1.765%, and 1.53-1.55%.


Commodities – CRB tests next resistance at 311.5-313 (2014 highs), and above this to 321.5-326 (2012 highs), 331.62 (61.8% retracement), and 366-371 (2006/2011 highs). Initial support rises to 283-285,274, 265,5, 260-263, and 238-241. WTI Crude Oil continues to trend higher to next resistance at 147.27 (Jul 2008 all-time high). Initial support rises to 97-99, 90-91, 85-87, 78-81, and 65-66 and 62.5. Gold has broken out above 1,859-1,879.5, suggesting a retest of 2,089.20 (2020 all-time high). Support is 1,925-1,966.


Currencies – The 10-year minus 3-mo yield spread found key support at 1.40-1.44 (200-day ma and Aug 2021 uptrend). Above 1.71-1.73 signals steepening and rally to 2.09 (12/16 high). The long-end, medium, and short-end yields have broken out earlier in anticipation of the Fed’s March rate hikes. The recent consolidations may trigger the next sustainable rallies. TNX is nearing the top of the Jul 2021 uptrend channel at 2.065-2.16%. The breakout suggests 2.4-2.78%. Initial support is 1.836%, 1.68-1.765% and then 1.53-1.55%.


S&P 500 Sectors – RRG study shows continued rotation into the defensive, commodity-based, and interest-rate-sensitive sectors at the expense of cyclical and technology sectors. Industrial (XLI) joins Healthcare (XLV), Financials (XLF), Utilities (XLU), Consumer Staples (XLP), Energy (XLE), and Materials (XLB) in the Leading Quadrant. Communication Services (XLC) remains in the Improving Quadrant. Real Estate (XLRE) falls into the Weakening Quadrant. Technology (XLK) and Consumer Discretionary (XLY) weaken in the Lagging Quadrant.


To view the entire report go to the Reports tab on the website or click the following:


https://www.leebullbear.com/_files/ugd/f8f1c6_728bb5c479f54aa8ad9c23c82aa71487.pdf


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