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Technical Report for the Week of 06/14/21

Technical Summary


Equities – The SPX Index continues with its bullish Oct 2020 uptrend channel (4,144 and 4,392-4,404). A above 4,234-4,238 (May/Jun 2021 record highs) suggests 4,392-4,404 (top of the channel, near-term), 4,419 (4,238 breakout target, medium-term), and then 4,595-4,664 (V-pattern and channel breakout targets, intermediate-term). Key initial support rises to 4,144-4,168 (6/3/21 low, 50-day ma, and the bottom of Oct 2020 uptrend channel), and below this to 4,041-4,061 (May 2021 lows and 38.2% retracement from the Mar-May 2021 rally).


Fixed Income – TYX and TNX 3-month sideways trading range consolidations have failed to materialize as lower-highs and a lower-lows hint of lower US interest rates. TYX and TNX have achieved their Aug 2020 uptrend channel breakout targets at 2.44-2.55% and 1.66-1.68%, respectively. Overbought conditions and negative outside days (6/4 and 6/10/21) hint of a retest of the key initial support at 2.161-2.170% (TYX) and 1.471% (TNX). Initial resistance is 2.292% (50-day ma) and 2.417-2.505% (TYX) and 1.604% (50-day ma) and 1.70-1.765% (TNX).


Commodities – CRB Index has broken out above intermediate-term resistances at 178/197, suggesting a key test at 215-216 (2011 downtrend). Support rises to 200-201.5 (10-wk/50-day ma, and Apr/May 2020 uptrend). WTI Crude has broken out above key resistance at 65.65-66.60 (Apr 2020 and Jan 2021 highs). The breakout suggests the next WTI Crude rally to 75-77 (2008 downtrend). Support is 66-68, 63.5-65, 57-58/55, and 52. Gold has stalled at 1,919.20 (6/1/21 high) below the key resistance at 1,930-1,935. Initial support is 1,845-1,875/1,821-1,835.


Currencies – US Dollar shows 2 conflicting patterns – double bottom and head/shoulders top. Neckline support is 89.17-89.63 (Jan/May 2021 lows). Resistance is 91.61-91.69 (left/right shoulders and 200-day ma) and 93.47-94.79. EURUSD has failed to clear key initial resistance at 1.2243-1.2266 (2/25 and 5/25/21 highs) and 1.2349 (1/6/21 high). Key initial support is 1.199-1.208 (50-day and 200-day ma). JPYUSD still technical work to establish a technical base between 0.9012-0.9064 (Mar/Jun 2021lows) and 0.916 (50-day ma) and then 0.9304 (4/23/21 high).


S&P 500 Sectors – Sector rotations show only minor changes from the prior week. Industrials (XLI) have fallen from the Leading Quadrant joining Financials (XLF), Communication Services (XLC), and Energy (XLE) in the Weakening Quadrant. Real Estate (XLRE) and Material (XLB) remain in the Leading Quadrant, with XLB losing relative price momentum. Healthcare (XLV), Utilities (XLU), and Consumer Staples (XLP) remain in the Improving Quadrant, with XLV continuing to gain price momentum. Technology (XLK) and Consumer Discretionary (XLY) continue to improve in the Lagging Quadrant but still need further technical work before they can move into the Improving Quadrant.


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