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Technical Report for the Week of 08/16/21

Technical Summary


Equities – Despite the strong gains this year, SPX continues with its well-defined May 2021 uptrend channel between 4,352 and 4,512. The recent 8/6/21 breakout above 4,429.77 suggests +57.46 or an SPX target of 4,487-4,512, near-term. The 7/23/21 breakout above 4,393.68 also suggests 160.55 points or 4,554.23, medium-term. The key initial support rises to 4,423-4,430 (8/6/21 breakout), and below this to 4,373-4,394 (7/23/21 breakout and 7/23 and 8/3/21 lows), 4,352 (Bottom of the May 2021 uptrend channel), and 4,233-4,257 (7/19/21 low and Jun 2021 breakouts).


Fixed Income – The steepening of the 10-year/3-mo US yield spread is testing key support at 1.14-1.26 (prior breakout and 200-day ma), signaling an inflection point. US yields including 30-year, 10-year, 5-year, 3-year, and 2-year have broken down. However, the 30-year yield is attempting to breakout. TNX may have found key support at 1.129-1.135% or the 50% retracement (1.135%) from Aug 2020-Mar 2021 rally and Jul/Aug 2021 lows (1.128-1.129%). Key initial resistance is 1.306-1.373% (50-day/200-day ma) and 1.471% (Jul breakdown).


Commodities – CRB Index has broken several pivotal resistances, suggesting the next CRB rally to 233.5-244 and 267-287. Initial support is 212.5 (50-day ma), 200-205, and 191. WTI Crude Oil has struggled at key resistance at 75-77 (2008 downtrend, Oct 2018 highs, and the 50% retracement from Jun 2008-Apr 2020 decline). Key support is 65 (30-wk ma and Jul/Aug 2021 lows) and 60.5-61.5. Gold is rebounding from key support at 1,673-1,677 (Mar/Aug 2021 lows). Key initial resistance is 1,808-1,817 (50-day/200-day ma), and 1,919-1923/1,947-1,962.5.


Currencies – US Dollar continues with its base via triangle and two higher-low patterns. Key resistance is 93.21-93.47 and 94.61-94.82. Initial support is 91.39-92.04 (50-day and 200-day ma) and 89.17-89.51/88.15. EURUSD continues with head/shoulders top or triangle pattern. Key resistance is 1.189-1.20 (50-day/200-day ma) and 1.2243-1.2266/1.2349. Key support is 1.1703-1.1706/1.1605. JPYUSD continues to bottom. Key resistance is 0.917 and 0.9304-0.932 (200-day ma). Key support is 0.8956-0.9012 and 0.8899-0.8916.


S&P 500 Sectors – RRG sector studies show a defensive tilt among the S&P sectors from the prior week. Technology (XLK) and Healthcare (XLV) are the only two S&P sectors residing in the Leading Quadrant as they continue to trend higher. Two S&P sectors, including the Communication Services (XLC) and Real Estate (XLRE), have slipped into the Weakening Quadrant, suggesting corrections. More than half or six S&P sectors reside in the Lagging Quadrant - Consumer Staples (XLP), Financials (XLF), Energy (XLE), Industrials (XLI), Utilities (XLU), and Materials (XLB). Consumer Discretionary (XLY) is the only sector trending higher within the Improving Quadrant.


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


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