S&P 500 rose once again, and the slight retreat before the close isn't an issue in light of constructive credit markets. Tech, communications, industrials, value, real estate and financials rose, while health care and notably utilities didn't play along. The VIX has calmed down again, but the put/call ratio scored bullish complacency readings not seen for months. The boat is increasingly getting tilted towards the bullish side – but open long profits can keep growing.
Credit markets though aren't flashing warnings signs – be that corporate bonds, Treasuries of various maturities, or different Treasury spreads such as the 10- to 2-year notes. It‘s just the dollar that is tanking here on the Fed telegraphing taper while the market continues to bet it's still bluffing:
The S&P 500 is firing on both cylinders at the moment, with technology jumping higher off very oversold levels, and FAANG stocks not lagging too noticeably behind. The NASDAQ Composite is well bid at the moment, and it remains to be seen how value takes to retreating yields in the still ruling reopening trades atmosphere.
Gold and miners aren't flashing warning signs, and silver's outperformance isn't a call to the exit door. The charts and macroeconomics speak in favor of continued bullish consolidation before a spurt higher in all three assets. And as the Fed isn't perceived to get tough(er), the path of least resistance remains up as the copper to 10-year yield ratio confirms. Open gold profits can keep growing at their own pace, but I wouldn't be surprised by a brief setback first.
Crude oil bulls have proved themselves on the Iranian sanction news, and the oil index (ARCA Oil) remains overall constructive, but favoring a little pullback in black gold first. The downswing attempt I wrote about yesterday, is increasingly unlikely now while the upside potential got greatly exhausted. It is time to wait for another mispricing – one that would offer corrections to join the budding trend.
Bitcoin and Ethereum still remain vulnerable as buying fizzled out without taking on the upper border of the $38,000-$40,000 zone that would let the bulls start turning the tide. It hasn't happened yet, and the retracement of yesterday's upswing is reaching a bit too far for both Bitcoin ($37,000) and Ethereum ($2,435). The lookout remains tense.
Let‘s move right into the charts (all courtesy of www.stockcharts.com).
Gold, Silver And Miners
The gold sector keeps cooling off, unchallenged on the downside. Nominal yields posture remains positive.
Silver offers a little roller coaster ride, but the copper-to-10-year-Treasury-yield ratio is still in quite fine shape, and real rates aren‘t biting.
Bitcoin And Ethereum
The tug of war is at a precarious stage. How much of yesterday's gains will be erased today? The bulls don't seem to be out of the woods yet.
Summary
S&P 500 faces little immediate danger of plunging lower. We are about to have a likely uneventful session today.
Gold and miners aren't remotely seriously challenged by the bears, and consolidation before another upswing seems most probable.
Crude oil has reached the top of its recent range, especially when the oil sector is considered.
Bitcoin and Ethereum still remain at crossroads, but the prominence of an upper or lower knot would be telling.