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Technical Report for the Week of 06/21/21

Updated: Jun 25, 2021

Technical Summary

Equities – The SPX Index retains its bullish Nov 2020 uptrend channel between 4,165 and 4,395-4,431). Above 4,238-4,257 (May/Jun 2021 record highs) suggests 4,395-4,431 (top of the channel, near-term), 4,419-4,438 (breakout target, medium-term), and then 4,595-4,697 (V-pattern and channel breakout targets, intermediate-term). Key initial support rises to 4,165-4,182 (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 – After steepening, the US Treasury yield curve has contracted over the past 3-months. Is this a near-term condition or the start of something more? 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 the Aug 2020 uptrend breakdowns warn of corrections. The key initial support is the 200-day ma at 1.924% (TYX) and 1.45-1.471% or the May/Jun 2021 lows (TNX). Initial resistance is 2.161/2.273% (TYX) and 1.588-1.594% (TNX).

Commodities – CRB Index’s key intermediate-term resistance is 215 (2011 downtrend). An overbought condition warns of a correction to initial support at 202.5-203.5 (10-wk/50-day ma, and Apr/May 2020 uptrend). WTI Crude Oil is nearing major resistance at 75-77 (2008 downtrend, Oct 2018 highs, and the 50% retracement from Jun 2008-Apr 2020 decline). Initial support is 66-68, 60.5-61.5, 57-59/55, and 53.25. Gold has violated its Mar 2021 uptrend channel (1,880) and 50-day/200-day ma (1,829.5/1,842). Next support is 1,754-1,767 and 1,673-1,677.

Currencies – US Dollar has negated a 6-month head/shoulders top on the recent move above 91.59-91.62. The breakout renders the next rally to 93.47-94.80 and then 96-96.55. Initial support rises to 90.68-91.59 (50-day and 200-day ma). EURUSD has struggled at key resistance near 1.2243-1.2266 (2/25 and 5/25/21 highs) and 1.2349 (1/6/21 high). Key support is 1.1605-1.1703 (11/4/20 and 3/31/21 lows or neckline). JPYUSD remains in a consolidation between 0.9012-0.9023 (Mar/Jun 2021 lows) and 0.9304 (4/23/21 reaction high).

S&P 500 Sectors – Sector rotations show minor changes from the prior week. Real Estate (XLRE) and Material (XLB) remain in the Leading Quadrant, with XLB weakening and XLRE strengthening. Industrials (XLI), Financials (XLF), Communication Services (XLC), and Energy (XLE) remain in the Weakening Quadrant. XLI and XLF continue to weaken further, while XLC and XLE are bottoming. Healthcare (XLV), Utilities (XLU), and Consumer Staples (XLP) reside within the Improving Quadrant, with XLV gaining price momentum. Technology (XLK) and Consumer Discretionary (XLY) remain within the Lagging Quadrant, with XLK close to moving into the Improving Quadrant.

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