Equities – The 10/22/21 breakout above 4,545.85 still renders a near-term SPX target at 4,813-4,824 (top of Mar 2021 uptrend channel) and above this to 4,970-4,992.5 (top of Sep 2020 uptrend channel and the head and shoulders bottom breakout target). SPX may be headed toward another inflection point. Next week can help decide either the next rally or correction. Key initial support is 4,600-4,604 (50-day ma and the right shoulders), and below this to 4,492-4,495 (bottom of the Mar 2021 uptrend and 12/3/21 low), and 4,346 (200-day ma).
Fixed Income – The 10-year minus 3-mo US yield spreads have contracted. Key support remains 1.14-1.16 (prior breakout). Above 1.50/1.46 and 1.62-1.73 confirms the resumption of the steepening curve. The long-end of the US treasury yields (falling) continues to diverge from the short-end (rising), suggesting investors expect the Fed to hike interest rates sooner (hawkish). TNX continues to consolidate between key support at 1.129-1.131% (Jul/Aug 2021 lows) and key resistance at 1.69-1.765% (Mar/Oct 2021 highs).
Commodities – CRB stalled below 243.67-245 (38.2% retracement from 2008-2021 decline and 2004 breakout). An overbought condition warns of consolidation to 218-221.5 (12/1/21 low and 30-wk ma), and below this to 214.25-215 (10-mo and 200-day ma). WTI Crude Oil shows a head and shoulders top. Key neckline support is 61.56-62.43 (May/Aug/Dec 2021 lows). Left and right shoulders are 77-79, and the head is 85.41. Gold continues with its technical base between initial support at 1,721-1,750 (Jun/Sep 2021 lows) and resistance at 1,83-1,879.5.
Currencies – US Dollar breakout above 94.52-94.82 confirms a 2-yr cup and-handle/saucer bottom and higher prices. A near-term trading range has developed between 95.53-95.84 and 96.90-96.94. EURUSD continues with its bearish flag/pennant pattern. Below 1.1186 confirms the breakdown. Above 1.1383/1.144 confirms breakout. JPYUSD shows technical signs of a near-term bottom via a head/shoulders bottom. The left and right shoulders are 0.8727 and 0.8752, and the head is 0.8657. Above neckline at 0.8872-0.8886 confirms breakout.
S&P 500 Sectors – Technology (XLK) rejoins Energy (XLE) and Consumer Discretionary (XLY) in the Leading Quadrant, with XLF and XLE declining in price momentum. Financials (XLF) slips into the Lagging Quadrant joining Communication Services (XLC), Healthcare (XLV), and Real Estate (XLRE), with XLV and XLRE improving in price momentum. Utilities (XLU), Consumer Staples (XLP), Materials, (XLB), and Industrials (XLI) strengthen within the Improving Quadrant.
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