Equities – The 10/22/21 breakout above the prior 9/2/21 all-time high of 4,545.85 suggests 266.91 points or an SPX technical target to 4,770 (top of the Mar/Apr 2021 uptrend channel), and above this to 4,813 (breakout projection). Initial support rises to 4,624-4,631 (11/10/21 low and internal trendline), 4,546-4,551 (10/22/21 breakout and 38.2% retracement from Oct-Nov 2021 rally), 4,499-4,511 (50% retracement and the 50-day ma), 4,413-4,447 (61.8% retracement and the bottom of Mar/Apr 2021 uptrend channel), 4,274.5-4,279 (10/4/21 low and 200-day ma). Initial resistance is 4,718.5-4,770 (11/5/21 all-time high and the top of the Mar/Apr 2021 uptrend channel).
Fixed Income – The 10-year minus 3-mo US yield spread is retesting key initial support at 1.44-1.47/1.40 (50-day/200-day ma/Nov 2021 low). A rebound signals the next rally to key resistance at 1.62-1.73 (Mar and Oct 2021 highs). The long-end of the US treasury yields continues to diverge from the short-end of the yield curve. Are bond investors expecting the Fed to increase rates sooner than later? TNX consolidates between key initial support at 1.47-1.52% (50-day and 200-day ma) and key initial resistance at 1.691-1.77% (2021 highs).
Commodities – CRB surge above 233.5-236 led to a rally toward key resistance at 243.67-245 (38.2% retracement from 2008-2021 decline and 2004 breakout). Support is 232-235 (50-day/10-wk ma) and 219-221.25 (9/15/21 breakout and 30-wk ma). WTI Crude Oil has broken out above its 2009 downtrend channel at 74-77, signaling the next WTI rally to the mid-80s/low-90s. Key support rises to 75-77 and 69-72. Gold’s breakout above 1,837-1,837 hints at 1,1919-1,941/1,962.5-1,985. Initial support is 1,837-1,838/1,791-1,793.
Currencies – US Dollar breakout above 94.52-94.82, confirming a 2-yr cup and handle/ saucer bottom and the next USD target at 96.57, 97.81-98.31, and 99.33-99.81. The key initial support is 94.61-94.79. EURUSD’s breakdown suggests support at 1.125-1.1255. Violation warns of the next decline to 1.1146-1.1168. Initial resistance is 1.140-1.15. JPYUSD continues to test key support at 0.8700-0.8730 (Nov 2017, Oct 2018, and Oct/Nov 2021 lows). Key resistance is 0.8872-0.8880 (50-day ma and the Nov 2021 high).
S&P 500 Sectors –The RRG sector study shows selective market favoring several key sectors in the value, cyclical, and commodity areas. Energy (XLE), Consumer Discretionary (XLY), and Financial (XLF) remain in the Leading Quadrant, with XLF and XLE losing price momentum. Technology (XLK) improves within the Weakening Quadrant and will soon return to the Leading Quadrant. Real Estate (XLRE), Healthcare (XLV), Communication Services (XLC), Utilities (XLU), and Consumer Staples (XLP) remain in the Lagging Quadrant. Materials (XLB), and Healthcare (XLI) continue to strengthen in the Improving Quadrant.
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