Technical Report for the Week of March 29, 2021
Equities – Except for a brief and temporary breakdown during 3/5/21 and 3/6/21, the prevailing Nov 2020 uptrend channel remains intact for the SPX Index. A successful test of the bottom of its uptrend channel (3,842-3,870) and the 50-day ma (3,874) signals the next SPX rally toward 3,983.87 (3/17/21 all-time high), and above this to 4,070 (top of the Nov 2020 uptrend channel), 4,136 (161.8% Fibonacci Projection), and then to 4,177.5 (3/11/21 short-term breakout projection). Initial support rises to 3,853.5-3,874 (3/25/21 low and the 50-day ma), and below this to 3,842-3,870 (bottom of the Nov 2020 uptrend channel), and then to 3,694-3,723 (Jan/Mar 2021 lows).
Fixed Income – The 10-year (TNX) and 30-year treasury yields (TYX) have rallied sharply toward key resistances near their respective Sep, Nov, and Dec 2019 reaction highs at 1.903%, 1.943%, and 1.935% (TNX), and 2.378%, 2.427%, and 2.389% (TYX). TYX recently achieved its 2019 highs. Will TNX also trade to its late-2019 highs? TYX and TNX have achieved their Aug 2020 uptrend channel breakouts at 2.44-2.55% (TYX) and 1.66-1.68%. Initial supports are 2.293-2.3%, 2.11%, and 1.915-1.995% (TYX) and 1.515%, 1.348%, and 1.187-1.22% (TNX).
Commodities – CRB Index has cleared above its 2018 intermediate-term downtrend (178), suggesting the next rally to 202-207 (2008 highs). Initial support is 184-186, 175.5, and 166-168. WTI Crude has stalled near the key resistance at 65.65-66.60, prompting the recent consolidation. Initial support is 57.5-59.5, and below this to 48.5-50.5. Gold is rebounding from key support at 1,666-1,695 (bottom of the 7-month channel and the 61.8% retracement from the Mar-Aug 2020 rally). Initial resistance is 1,754-1,782, and above this to 1,860-1,897.
Currencies – US Dollar (USD) continues to bottom via two higher-low patterns. The next resistance is 92.5-93 (200-day ma). Initial support is 91-91.5, 89.17-89.68, and 88.15-89.17. EURUSD has violated supports at 1.205-1.21 (2020 uptrend channel and 50-day ma) and 1.184 (200-day ma). Support is 1.17-1.1769. Initial resistance is 1.1836-1.1845. JPYUSD is testing support at 0.9103 (6/5/20 low), and then 0.8916-0.8956 (Feb/Mar 2020 lows). Initial resistance is 0.9225-0.9230, and then 0.9411-0.971.
S&P 500 Sectors – In the past eight weeks ending on March 22, 2021, sector rotations continue to show a mixed market as 7 S&P sectors reside within the Weakening and Lagging Quadrants. Communication Services (XLC), Energy (XLE), and Financial (XLF) retain leadership roles with the Leading Quadrant. Healthcare (XLV) joins Industrial (XLI), Consumer Discretionary (XLY), Technology (XLK), Consumer Staples (XLP), and Utilities (XLU) in the Lagging Quadrant. Real Estate (XLRE) continues to improve within the Improving Quadrant. Materials (XLB) and Industrials (XLI) remain in the Weakening Quadrant. XLI continues to strengthen, and if this trend continues, this cyclical sector will soon return to the Leading Quadrant.
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