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Technical Report for the Week of 04/17/23

Equities – SPX – Conflicting patterns suggest a mixed market - May 2022 head and shoulders bottom and Nov 2022 head and shoulders top. SPX nears 4,195.44 (2/2/23 high or the head). A breakout negates the h/s top and suggests 4,308-4,325 (61.8% retracement from Jan-Oct 2022 decline, the May/Aug 2022 highs, and the neckline). A breakout confirms the h/s bottom and the next bull rally to 4,818.62. Key initial support rises to 3,950-3,034 (50/200-day ma) and below 3,904 (extension of Jan 2022 downtrend), and 3,809-3,828 (Mar 2022 low/Nov 2022 uptrend).

Fixed Income – TYX (monthly) – Above 3.0-3.03% /3.445% (2018 high) confirms structural breakout. A 3/2/23 island reversal warns consolidation to 3.413-3.68% (200-day ma). TNX (monthly) – Breakout above 3.036-3.248% suggests a structural breakout. A negative outside month (Mar 2023) still warns of consolidation to 3.036-3.248%. TNX (daily) – After peaking at 4.833% (10/21/22), a downtrend channel has developed between 3.13-3.30% and 4.01-4.09%. The 50-day and 200-day ma at 3.52-3.65% is critical initial resistance.

Commodities – CRB – Breakout above 272-275 (2022 downtrend) renders a rally to 276.5-280.25 (200-day ma). Initial support is 272-275 (breakout) and 266-267.5 (Feb 2022 lows/50-day ma). WTI Crude – The ability to find support at 64.36 (Aug/Dec 2022 lows and the bottom of 2022 downtrend channel) suggests a retest of critical resistance at 81-83.5 (Jul 2022 downtrend and the 200-day ma). Gold faded at 2,063.40 (4/13/23) or below 2,078.80 (3/8/22 reaction high). Initial support is 1,966.5-1,975/1,917-1,919.

Currencies – USD – A 1-year h/s top with the neckline at 100.42-101.42 (May 2022 and Feb/Apr 2023 lows). Positive outside day on 4/14/23 hints at an oversold rally to 102.5-103.2 and 105.5-106.5. EURUSD – Dec 2022 downtrend breakout above 1.07 hints at a bottom. A negative outside day on 4/14/23 warns at consolidation to 1.074-1.0831. USDJPY – A head and shoulders top with the neckline at 126.36-127.49 (May 2022 and Jan 2023 lows). An oversold rally nears initial resistance at 133.76-134.78 (50-day ma) and 137.25-139.5 (shoulders).

S&P 500 Sectors – RRG study shows a loss of momentum from the previous week. Seven sectors reside in Lagging Quadrant, including Materials, Real Estate (XLRE), Financial (XLF), Energy (XLE), Consumer Staples (XLP), Healthcare (XLV), and Utilities (XLU). XLU, XLP, XLV, and XLE improve. Industrial (XLI) remains in the Weakening Quadrant. Consumer Discretionary (XLY) continues to lose relative momentum in the Improving Quadrant. Technology (XLK) and Communication Services (XLC) weakened in the Leading Quadrant.

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