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SPY Analysis - Market Breadth, Fed Rate Cycles, and InflationI measure the breadth in the S&P as the SPY (market cap weighted S&P) divided by RSP (equal weighted S&P ETF). The higher the ratio, the more concentrated the market, and therefore less market breadth. As can be seen, nearly every time the ratio has neared 3.0, the Fed has ensued with an easy money policy, and the SPY subsequently turned bullish. During these times, Fed rates, as well as inflation, were relatively low. There are several exceptions. in November and December 2021, the ratio neared 3.0 at 2.97, and the Fed ensued in early 2022 with an historic rate tightening cycle, on the heals of persistent inflation of 4.7 percent in 2021 which had resulted (and continues today) from the massive COVID stimulus program. The end result was the selloff in we experienced in 2022. Another exception was the period from 2015 to 2019, when rates were gradually raised, but maxed out at 2.40 in a relatively low inflation environment. This is not the environment that we are in today. Today, we have already had a 50 - 61% retrace from the low posted in October, 2022, and the market breadth is again at a low (SPY/RSP=3.00) . The Fed now has the option of pausing/easing and in effect pump a bull, but by doing so it will face a huge dilemma: with an annual inflation rate of 8 percent, and the largest budget deficit in modern history, a return to easy money will further fuel inflation. The other option would be to continue the rate hikes, and promote an economic collapse (starting with the banking sector), which will effectively bring the breadth issue to rest (along with the entire market). Neither of these are good options. Bitter pill...
AMEX:SPY
by UnknownUnicorn13101
S&P Equal Weight Index (RSP Daily analysis)The volume below is very thin (yellow highlight), and the chart trend is downward and weakening. The equal weight index actually performed a little better than the weighted index during the selloff, retracing only 42% versus SPY 50% during the period of Covid low in March 2020 to all time high in January 2022. There are three lines of potential support, all at volume points of control as well as Gann lines: 138.96, or -1.8% from 5/12 close at 141.52 135.31, or -4.4% from 5/12 close 130.2, or 8.0 % from 5/12 close I'm inclined to believe the 8% scenario is most probable, since typical corrections (which I believe is imminent) range around 7%.
AMEX:RSPShort
by UnknownUnicorn13101
ALT SP 500 WAVE STRUCTURE IS STILL VALID 4th wave The chart posted is the alt wave structure . there is a cycle low due 12/16 and odds favor the last grasp up into jan 3/10 . I still need time for the 2023 forecast as it is a very neg cycle I am working on the time spirals still and it take hours to back check the data back to 1902 . So for now I still feel that we are now in dec late 1973 . The cycle projection from dec forecast model was spot on for the low due 10/4 to the 20th focus on the 10th and a target of 3510/3490 . I am working on the math > I can tell everyone that 2023 will see another drop and decline with the market going from inflation to a massive deflation cycle as the chart of housing is just starting to roll over. As the 40 plus year bull market in BONDS has ended and we just are going back to mean in RATES I do not see rates ever going back to under 2/2.5 in the 10 yr and I have a view that we will see a debt implosion The final bear market low should be oct 2023 and sideways to down into oct 2024 The DEPRESSION LOW
AMEX:RSP
by wavetimer
ALL INDEXES SAME PATTERN ABC DECLINE INTO .382 AND 50 % IHAVE NOW COVERED ALL NET SHORTS .I am now moving to a net LONG AT 50 TO 75 % as of this morning . In fact TROW model told me we would see this sharp drop into cycle low due now TROW also dropped to a perfect .618 at todays low at 109.40 the low 109.18 I am net long and out of any shorts at this point BEST OF TRADES WAVETIMER I will be posting the long term update and forecast as I did in dec 22 2021 over this weekend . BEST OF TRADES WAVETIMER
AMEX:RSPLong
by wavetimer
$SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) – (Net High/Low 33$SPX posted its second consecutive week of gain (+3.95%), reclaiming its 50-day moving average (declining) during the week. $SPX is currently 5.6% away from recapturing its 200-day moving average. There is a growing belief among market participants that the Fed will soften its approach after the November meeting. The policy move from the Bank of Canada this week further fueled this notion. The Bank of Canada raised its key policy rate by 50 basis points versus an expected 75 basis points. The European Central Bank, however, delivered a 75 basis point increase for its key policy rates, as expected. Market participants digested a slew of economic data this week that both supported and undermined the notion that the Fed will soften its approach soon. Some of the data releases included: September PCE Prices 0.3% The key takeaway from the report is that with continued income growth and a slightly hotter than expected Core PCE price growth, the Fed has an argument to maintain its aggressive rate hike course. Weekly Initial Claims 217K The key takeaway from the report is that the initial claims data suggest the labor market continues to hold up well, which of course is something that will continue to draw the Fed’s attention. Q3 GDP-Adv. 2.6% The key takeaway from the report is that it ends a two-quarter streak of negative GDP prints. It also suggests the economy held up well in the third quarter as it started to acclimate to rising interest rates. Real final sales of domestic product, which excludes the change in private inventories, increased a solid 3.3%. October Consumer Confidence 102.5 The key takeaway from the report is that consumers’ concerns about inflation picked up again in October on the back of rising gas and food prices. Falling Treasury yields were also a big support factor for the stock market rally during the week. The support to watch for this week is revised up to 3,720 level, a beach of $SPX rising 10 & 20-day moving average. Bull Case: Reclaim above 4,110, 200-day moving average level. Bear Case: Breakdown of 3,720 level, beaching its rising 10 & 20-day moving average. Next support at 3,490 level.
AMEX:RSP
by jfsrevg
$SPX (S&P 500) vs $RSP (S&P 500 Equal Weight)$SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) – (Net High/Low +17) The stock market came into this shortened week of trading on a three-week losing streak. It looked on Tuesday as if that streak might be extended to four weeks, but there was an abrupt turn in sentiment that powered a strong move in the major indices over the last three sessions from 3,900 support level. The losing streak was eventually broken and both the $SPX and $QQQ had reclaimed a posture back above their 50-day moving averages. The resilience to selling efforts in the face of negative developments has fostered a sense that the market has priced in the near-term rate hikes already after enduring three, consecutive weeks of losses. At Tuesday's low, the $SPX was down 10.1% from the intraday high it saw on August 16, so there has been an added sense that the market had gotten oversold and was due for a technical bounce. At the current juncture, the mid-term downtrend remains intact as $SPX remains trading below its declining 200-day moving average, and AVWAP from all time high. The support to watch for this week remains at 3,900 level, the recent lowest level. Bull Case: Reclaim above 4,212 AVWAP from all time high. Immediate resistance at declining 200-day moving average and downtrend line. Bear Case: Breakdown of 3,900 recent low. next support at 3,800.
AMEX:RSP
by jfsrevg
Breadth has been strong and this week will be critical for $RSPThe market as a whole needs this rally to have healthy breadth and so far that's what it looks like is happening, a broad-based rally. It closed above its 200 DMA for the first time since April 21st (albeit by just 13 cents) which is also when the downtrend started. The downtrend has been thoroughly broken. Looking for 2-3 more strong daily closes above the 200 DMA to be relatively certain that the rally will continue and we could be back in a bull market.
AMEX:RSP
by EBITDAtiger
Reversal likely to hold up #SPX $SPY $RSP I expect some continuation from this recent rally. The percentage of SPX stocks trading above their 50-day MA is now bouncing from being too far below the lower band of the channel I have defined. Annotated on the chart are the previous times it significantly breached the lower band. MACD histogram turning green with MACD line curling up for a cross. RSI bounced and has some momentum. Next test at 50. Bar some terrible news from Ukraine or Taiwan, we should see some of this momentum carry the market higher. For how long? Unclear. I would like to see $RSP start to outperform $SPY to signify broad strength opposed to a few names carrying the entire index (not sustainable or healthy).
INDEX:S5FILong
by EBITDAtiger
$SPX (S&P 500) vs $RSP (S&P 500 Equal Weight)$SPX fell further with a loss of -1.58% last week, driven primarily by worsening Russia-Ukraine developments. Risk sentiment was further pressured by disappointing growth-stock earnings reactions and lingering concerns about a Fed policy mistake. 10 of the 11 S&P 500 sectors ended the week in negative territory. With a considerable loss of -1.58% over the week, improved posture in weekly market breath is actually observed as below; % of Stocks Above 200 DMA = 34.29% (+0.03%) % of Stocks Above 50 DMA = 35.54% (-0.14%) $SPX remains resisted by a Downtrend Line, along with its 200-day moving average. The immediate support to watch for $SPX this week remains at 4,320 level. A breach of 4,320 level would be concerning in mid-term as it would confirm the establishment of a downtrend channel (lower highs, lower lows) on $SPX.
SP:SPX
by jfsrevg
$SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) $SPX breached its 200-day moving average, as $SPX upward momentum faltered with a -1.90% plunge on Friday after National Security Advisor Jake Sullivan acknowledged there was a “distinct possibility” that Russia could invade Ukraine before the end of the Olympics. $SPX ended the market week with a loss of -1.82%. $SPX remains resisted by a Downtrend Line coinciding with its all time high VWAP resistance. It is worth to note further deceleration of deterioration on market technical is witnessed on US Market Net Highs/Lows, with only -65 companies for the week (comparing to -121 companies on previous week). The immediate support to watch for $SPX this week is at 4,320 level. A breach of 4,320 level would be concerning in mid-term as it would confirm the establishment of a downtrend channel (lower highs, lower lows) on $SPX. he large-cap indices struggled last week, as risk sentiment was pressured by increased rate-hike expectations and concerns over tensions between Russia and Ukraine. The S&P 500 fell -1.8%, the Nasdaq Composite fell -2.2%, and Dow Jones Industrial Average fell -1.0%. The Russell 2000, however, rose +1.4%. Wednesday’s Fed minutes may provide a sense of how quickly policymakers want a rate-hike. The U.S. data calendar features January figures on producer prices, which will be closely watched after data last week showing consumer prices hit their highest in 40 years last month. Meanwhile, earnings season is ending, but not before a last flurry of reports. Here’s what you need to know to start your week. 1. Geopolitical tensions – Gold & Crude Wall Street’s three main indexes closed sharply lower on Friday after the White House warned that a Russian attack on Ukraine could begin any day. While stocks got hit, prices for Treasuries, the dollar and other safe-haven assets, such as gold ($GLD) rose. Crude prices also surged as the prospect of sanctions on Russia, a top producer, added to fears over already tight global supplies. Some analysts believe soaring crude prices could exacerbate already high inflation, adding to pressure on the Fed to raise rates more aggressively. 2. Geopolitical tensions – Lessons from 2014 In keeping in line with history, we could draw lessons from when Russia invaded the Crimean Peninsula in 2014. Tensions intensified over February through March in 2014 with the ensuing invasion drove a brief rally in the US 10-year Treasury note from a peak of 3.03% at the end of 2013 to about 2.58% by early February before stabilising in a 2.45%–2.6% range until June. There was a similarly mild and short-lived response in stocks and at a time of many other developments. The S&P500 sold-off by under 6% from late January through early February 2014 and then went on to rally for the remainder of the year. Russia eventually got heavily sanctioned and the ruble eventually collapses and subsequently drives imported inflation much higher. That scenario in 2014–15 drove the Russian central bank to hike its key rate from 5.5% at the start of 2014 to a peak of 17% by the end of 2014. The Russian economy achieved no growth in 2014 and shrank by 2% in 2015. Nevertheless, differences to 2014 include the facts that Russia’s military build-up appears to be much larger this time than in 2014 and both Europe and the US appear to be much more supportive militarily. Whether the net effect raises risk, or lowers it given a stronger counter presence is highly uncertain. 3. FOMC With markets already pricing in a strong chance the Fed will hike rates by half a percentage point at its upcoming March meeting, Wednesday’s minutes from the Fed’s January meeting, will be scrutinized for any indications on how big a move officials are contemplating. Last month Fed Chair Jerome Powell flagged a March lift-off and said there was “quite a bit of room” to raise interest rates without threatening the recovery in the labor market. Last Thursday Bullard said in the light of the latest CPI reading he now wants a full percentage point of interest rate hikes over the next three Fed meetings. On Friday, Goldman Sachs said it now expects seven quarter percentage point rate hikes this year, up from its previous forecast of five, as it updated its forecast following Thursday’s U.S. CPI data. 4. Earnings Earnings season is drawing to a close, but this week will see a big flurry of notable reports. Airbnb Inc ($ABNB) reports on Tuesday, followed by semiconductor giant NVIDIA ($NVDA) and Cisco Systems ($CSCO), which are both due to report after the close of trade on Wednesday. Deere ($DE), the world’s largest maker of farm equipment reports Friday. Retailer Walmart ($WMT), known for its everyday low pricing, reports Thursday, and is better positioned than other retailers to withstand rising price pressures. The pandemic has triggered inflation across the supply chain from labor to raw materials, forcing companies to pass higher prices onto consumers. However, many companies could still not fully offset the impact and that hit their profits.
AMEX:RSPLong
by jfsrevg
1
The Weekly Picture: $SPX vs $RSPThe earnings season enters one of its busiest phases this week with tech giants Microsoft ($MSFT), Apple ($AAPL) and Tesla ($TSLA) are due to report. Investors will be seeking reassurance from earnings result after last week’s selloff, but market volatility looks set to continue for now.  Fed Chair Jerome Powell is expected to signal that the central bank is on course to deliver its first rate hike since 2018 in March, in a bid to tackle soaring inflation. There is also data on U.S. Q4 GDP. Here’s what you need to know to start your week. 1. Earnings  Tech giants Microsoft ($MSFT), Apple ($AAPL) and Tesla ($TSLA) are among the big-name companies due to report in what will be a hectic week of earnings results, with investors looking to separate pandemic success stories from fundamentally strong companies. FAANG darling Netflix ($NFLX) tumbled over 20% on Friday, weighing on the S&P 500 and the Nasdaq, after it forecast new subscriber growth in the first quarter would be less than half of analysts' predictions. Microsoft, which reports Tuesday, is expected to report quarterly revenue of more than $50 billion for the first time, according to data compiled by FactSet. Tesla and Apple, reporting Wednesday and Thursday respectively, are expected to post record profits according to FactSet. Beyond tech, there are a host of other big companies reporting including 3M ($MMM), GE ($GE), IBM ($IBM), Intel ($INTC), Caterpillar ($CAT) and American Express ($AXP). Boeing ($BA), Mastercard ($MA), Visa ($V), McDonald's ($MCD), Johnson & Johnson ($JNJ), and Colgate-Palmolive ($CL) are also scheduled to report. 2. Fed to signal March rate hike Investors are looking to the Fed for more clarity on the future path of interest rates after data last week showed U.S. inflation rising to near forty-year highs. Jerome Powell is expected to indicate that the Fed will wind up its bond purchasing stimulus program on schedule at its March meeting and raise interest rates by a quarter point from current levels close to zero at the same meeting. With markets already pricing in roughly four rate hikes this year investors will also be focusing on what the Fed says about its almost $9 trillion balance sheet. Markets currently expect the Fed to start trimming the balance sheet later in the year as a way to tighten monetary policy. The minutes of the Fed’s December meeting indicated that officials held lengthy discussions about reducing bond holdings. Any indications that the balance sheet could be shrunk faster than in the past could extend the selloff in Treasuries and tech shares. Key Economic Calendar (Weekly) On Thursday the U.S. is to release advance data on fourth quarter gross domestic product with economists expecting annualized growth of 5.3%. Expectations have been pared back in recent weeks as rising coronavirus cases, driven by the Omicron variant hit economic activity. All times listed are EST Monday 3:30: Germany – Manufacturing PMI: seen to retreat to 57.0 from 57.4. Wednesday 14:00: US – Fed Interest Rate Decision 14:30: US – FOMC Press Conference Thursday 8:30: US – GDP: anticipated to have more than doubled, to 5.3% from 2.3%. Top 3 Leading and Lagging Sectors (Weekly) 1. $XLE (Energy) -0.92% 2. $XLP (Consumer Staples) -1.21% 3. $XLU (Utilities) -1.49% Benchmark: $SPY -5.72% 1. $XLY (Consumer Discretionary) -8.62% 2. $XLF (Financial) -7.42% 3. $XLB (Materials) -6.16% Market Breath (Weekly) % of Stocks Above 200 DMA = 31.30% (-28.90%) % of Stocks Above 50 DMA = 22.20% (-47.16%)  Market Technicals (Distribution Cycle Count: Day 6) $SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) – (Net High/Low -688) Markets look set to remain turbulent in the coming week with investors focused on the Fed and earnings. In a continuation of the tech selloff that has pushed the Nasdaq into correction territory, Wall Street’s main indexes closed sharply lower last week. The S&P 500 and the tech-heavy Nasdaq posted their largest weekly percentage declines since the start of the pandemic in March 2020. $SPX further declined -5.68%, after breaching the 4,610 support highlighted last week. $SPX is now trading below all major moving averages, the first time since March 2020. The $SPX Net High/Lows also affirmed the bearish theme with further deterioration of -688 companies within its constituents, similarly the lowest level since March 2020. Till date, $SPX have corrected -8.73% from its high (4th January 2022). $RSP have corrected -6.81% from its high (5th January 2022).  With $RSP trading at its highest daily sessional volume on Friday (since 2004), we are likely to see a bounce off 200MA for the indexes this week, if $RSP could hold its Friday low of $152.82. The immediate support to watch for $SPX this week is at 4,330 level, the previous major low established in $SPX during October 2021.
AMEX:RSPLong
by jfsrevg
4
The Big Picture: Renewed pandemic fear, S&P 500, Oil demand outlThe big story on the emergence of a new strain of COVID-19 in South Africa caused Wall Street’s three main indices ($SPX, $NDX, $RUT) to tumbled on Friday as they re-opened after Thursday’s Thanksgiving holiday with energy, financial and travel-related stocks bearing the brunt of the selloff. The renewal or pandemic fear has outlined as the biggest risk to today’s market, and it is likely to inject volatility to the market for the remaining of the year. Major indices dropped more than 2.0% on Friday, as investors sold risk assets. The $SPX fell 2.3%, the $NDX fell 2.2%, and the $DJI fell 2.5%. The $RUT 2000 underperformed with a 3.7% decline. WTI Crude Futures also fell -12.3% on Friday on worries of a supply glut. With Equal-Weighted $RSP sitting at its 50DMA confluence with resistance turned support at $156 range, there is a significant representation of $SPX stalling its sell off for this week. Last week’s leading sectors: $XLU (Utilities) +3.76% $XLP (Consumer Staples) +2.39% $XLV (Healthcare) +0.98% $SPX -2.20% This week’s watchlist: $MF, $PXD, $AA, $AMD and 55 more names. The new variant strain may also raise doubts over how quickly the Federal Reserve can move to unwind stimulus to tackle spiraling inflation. Eyes will be turned to the US jobs report due Friday, which will probably point to a continued recovery in the labor market. Elsewhere, Federal Reserve Chair Powell testifies before Congress, while a highly anticipated OPEC+ meeting is expected to offer guidance into the coalition’s crude output plans. Here’s what you need to know to start your week. Market Technicals $SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) $SPX declined -2.20% (-103.34 points). Similarly, Equal Weighted $RSP declined -2.00% (-3.19 points). As the week’s Omicron driven selloff happened on a shortened trading session on Friday, it is worth to note that the transactional volume of that shortened session have far exceeded an recent full average day’s trading volume (50D Average Volume) in all major indexes. With $RSP sitting at its 50DMA confluence with resistance turned support at $156 range, there is a significant representation of $SPX stalling its current sell off for the week. The key index and level to watch for the week will be $RSP at $155.75 for further confirmation of market weakness. The immediate support to watch for $SPX this week is at 4,585 level, a further break of the low of Friday’s lowest price action. New pandemic wave? Wall Street’s three main indices tumbled on Friday as they re-opened after Thursday’s Thanksgiving holiday with energy, financial and travel-related stocks bearing the brunt of the selloff, sparked by the discovery of the new coronavirus strain. While little is yet known of the new variant first detected in South Africa, scientists said it has a high number of mutations that may make it vaccine-resistant and more easily transmissible than the Delta variant. Before Friday, investors had been upbeat about the strength of the economic recovery amid broad vaccine availability and advances in treatments, despite fears over steadily rising inflation. Jobs report A robust November jobs report could underline the case for the Fed to speed up unwinding its $120 billion-a-month stimulus program at its next meeting in mid-December. But a fresh wave of the pandemic could throw those plans into doubt. Concerns over spiraling inflation, coupled with signs of an accelerating economic recovery had prompted investors to begin pricing in a faster taper and earlier interest rate hikes. Friday’s non-farm payrolls report for November is expected to show that the economy added 550,000 jobs, bringing the unemployment rate down slightly to 4.5%. Powell and Yellen testimony Fed Chairman Jerome Powell, fresh from his nomination for a second term by President Joe Biden, is due to testify on the CARES Act, the central bank’s pandemic-era stimulus program, before the Senate Banking Committee in Washington on Tuesday. Treasury Secretary Janet Yellen is also due to testify. A similar hearing will be held before the House Financial Committee on Wednesday. Investors will be looking for fresh insights on the outlook for the economic recovery amid renewed pandemic uncertainty. Oil demand outlook Oil prices plunged $10 a barrel on Friday, their largest one-day decline since April 2020, as news of the new Omicron variant saw countries rush to restrict travel, adding to concerns that a supply glut could swell in the first quarter. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) is due to meet on Thursday, after last week’s decision by the U.S. and other governments to release oil from strategic reserves in a bid to lower gasoline prices. For its part, OPEC+ has stuck to monthly output increases of 400,000 barrels per day (bpd) since August, despite calls to increase output to drive down oil prices.
AMEX:RSP
by jfsrevg
2
US Market Technicals Ahead (22 November – 26 November 2021)US markets will be closed on Thursday and will close early on Friday for the Thanksgiving holiday. The market will be paying close attention to Wednesday’s FOMC meeting minutes for fresh insights into the impact of soaring inflation on the future path of interest rates. Markets may also reprice the timing of future rate hikes if President Joe Biden were to promote current Fed Governor Lael Brainard to the Fed Chairman position, while the prospects of lower interest rates for longer could see a sell-off in U.S. Treasuries prompted by expectations for higher inflation. With $SPX (S&P 500) gaining +0.32% for the week, the bearish Rising Wedge formation of $RSP (S&P 500 equal weight) played out with a -1.24% loss. The correction in $RSP have reflected signs of fatigue in this market rally. Similar behavior of divergence is also witnessed between $QQQ and $QQQE. Last week’s leading sectors: $XLY (Consumer Discretionary) +3.76% $XLK (Technology) +2.39% $XLU (Utilities) +0.98% $SPX +0.32% This week’s watchlist: $ABNB, $AMAT, $AVTR, $ZIP, $BBW, $KLIC and 42 more names. There will also be a flurry of U.S. economic data on Wednesday ahead of the holiday, while PMI data out of the euro zone, UK and the U.S. during the week will outline the impact of supply chain issues and inflation on business activity. Here’s what you need to know to start your week. Market Technicals $SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) The benchmark index $SPX erased previous week losses, gaining +0.32% (+15.09 points). With $SPX trading just 0.43% away from its all time high, $RSP (S&P 500 Equal Weight) has played out the Bearish Wedge Formation that was highlighted last week, declining -1.24%. The correction in $RSP have reflected signs of fatigue, and downside potential of $SPX towards 4,640 level in near term. The immediate support to watch for $SPX this week is at 4,670 level, a break of its short term uptrend line and 10DMA. Fed minutes On Wednesday, the Fed will publish the minutes of its November meeting, in which policymakers decided the U.S. economy was strong enough to start scaling back its pandemic-era asset purchase program, put in place to bolster the recovery. Since then, the economic recovery has continued to accelerate, with job gains picking up and inflation continuing to soar, leading Fed Vice Chair Richard Clarida to call last week for a discussion on a quicker taper to position the Fed to hike rates sooner. Last Thursday, Chicago Fed President Charles Evans, known as a policy dove, said he is “more open-minded” to raising interest rates next year than he was six months ago. Separately, Atlanta Federal Reserve President Raphael Bostic has signaled his support for a mid-2022 rate hike. The Fed is due to publish fresh quarterly forecasts following its next meeting in mid-December and these may give a better read on how much policymakers’ views have altered. Biden’s Fed pick The White House said last week that President Joe Biden will likely decide before Thanksgiving whether to keep incumbent Fed Chair Jerome Powell in place for another term or promote current Fed Governor Lael Brainard to the position. Analysts expect some stock market volatility around the announcement, particularly if Brainard is chosen. Powell, whose term is due to end in February next year, was appointed in 2018 by then-President Donald Trump. Brainard, who has been on the Fed board since 2014 is favored by progressive Democrats and is seen as more dovish than Powell. If Brainard is appointed markets may reprice the timing of future rate hikes, while the prospects of lower interest rates for longer could see a sell-off in U.S. Treasuries prompted by expectations for higher inflation. U.S. data dump The U.S. is to release a string of economic data on Wednesday before markets close for Thursday’s holiday. The highlight will be figures on personal income and spending, which includes the core PCE price index, rumored to be the Fed’s favored inflation gauge. The economic calendar also features a revised data on third-quarter GDP, initial jobless claims, durable goods orders, new home sales and consumer sentiment. Reports on existing home sales and November PMI data, which is expected to show only a modest improvement will be released on Monday and Tuesday, respectively. PMIs While November PMI data out of the U.S. is expected to show a modest uptick in business activity, similar surveys from the euro zone and the UK are expected to show activity in the manufacturing and services sectors is slowing. Rising infection numbers are leading to renewed restrictions in some parts of Europe, while spiking gas prices are fueling inflation, compounded by a global supply chain crunch. The European Central Bank is coming under increasing pressure to tighten its ultra-loose monetary policy to offset the hit to households spending power, but ECB President Christine Lagarde has pushed back, arguing that tightening policy now could choke off the economic recovery. Meanwhile, the Bank of England looks set to become the first of the world’s big central banks to raise rates since the onset of the pandemic, with investors and economists expecting a rate hike at its upcoming December 16 meeting.
SP:SPX
by jfsrevg
2
US Market Technicals Ahead (15 November – 19 November 2021)As U.S. inflation has surged to the highest level in over thirty years, inflation is likely to remain in focus in the coming week with investors looking ahead to the latest U.S. monthly retail sales figures along with earnings results from major retailers, including $WMT (Walmart). With $SPX (S&P 500) erasing its weekly losses from Friday’s late week rally, the bearish Rising Wedge formation of $RSP (S&P 500 equal weight) remains in play. Attention has being turned towards small-cap companies after a nine month consolidation breakout on $IWM (Russell 2000), setting a potential new leg of multi month long market rally leading by this companies. It is worth to note that $GLD (Gold) have also broken out of a multi month long trendline resistance, gaining +2.71% as the leading asset class of the week. China will provide an update on the economic recovery via industrial production and retail sales and wide there are expectation for a slowdown in its economic recovery, just as Europe is experiencing a fresh surge in Covid-19 infections. Here’s what you need to know to start your week. Market Technicals $SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) The benchmark index $SPX retraced with a weekly loss of -0.31% (-14.68 points) confirming last week’s highlight on the over-extension of this rally which was 200% ATR away from its short term moving average, the first time since September 2020. With $SPX reducing its intraweek losses with Friday’s +0.72% gain, it is worth to note that $RSP (S&P 500 Equal Weight) has yet to break its Bearish Wedge Formation, which was has already played out in $SPX. The upwards consolidation of $RSP may be reflecting signs of fatigue, signaling downside potential of $SPX in near term. The immediate support to watch for $SPX this week is at 4,645 level, a break of its short term pivotal level. U.S. retail sales The highlight of the week’s economic calendar will be October retail sales data, due out on Tuesday, with economists expecting an increase of 1.1%, after a 0.7% rise in September. U.S. inflation has surged to the highest level in over thirty years amid a global supply chain crunch and data on Friday showed that consumer sentiment fell to its lowest in a decade this month, as higher prices eroded living standards. Investors are betting that the Federal Reserve will have to raise interest rates sooner than currently indicated to stop inflation spiraling upward. Retail earnings Third quarter earnings season is continuing to wind down, but investors will get an additional update on the strength of consumer spending this week with results from major retailers, including Home Depot ($HD), Walmart ($WMT), Target ($TGT), and Macy’s ($M). The earnings reports will face extra scrutiny ahead of the start of the holiday shopping season, with investors looking at guidance from retailers to determine whether inflation will eat into profits or be passed on to consumers. Third quarter earnings season has largely been upbeat. 459 of the companies in the S&P 500 have reported with 80% of earnings results beating analysts’ forecasts. China slowdown The recovery in the world’s number two economy is weakening and data on Monday, which includes reports on retail sales, fixed asset investment and industrial production is expected to confirm this. The loss of momentum in China, a key driver of global growth, is casting a shadow over the uneven global economic recovery from the pandemic. The recovery in China has been hit by an aggressive approach to containing Covid-19 outbreaks, a massive debt crisis in the country’s real estate sector and an energy crunch that has weighed on manufacturing activity. Analysts think the country’s central bank is likely to take a cautious approach to loosening monetary policy to bolster the economy as slowing growth combined with soaring inflation fuel concerns over stagflation. Meanwhile, U.S. President Joe Biden is to hold a virtual meeting with Chinese leader Xi Jinping on Monday, amid rising tensions between the world’s two largest economies. Pandemic resurgence hits Europe Europe is seeing a resurgence of the Covid-19 pandemic, adding to headwinds for the region’s already fragile economic recovery. Europe accounts for more than half of the average 7-day infections globally and about half of latest deaths, according to data compiled by Reuters, the highest levels since April last year when the virus was at its initial peak in Italy. Several countries, including the Netherlands, Germany, Austria and the Czech Republic are implementing restrictions or planning fresh measures to slow the spread. Holland entered a three-week partial lockdown on Saturday, the first in Western Europe since the summer. Germany reintroduced free Covid-19 tests on Saturday and Austria is to decide on Sunday whether to impose a lockdown on people who are not vaccinated.
SP:SPX
by jfsrevg
US Market Technicals Ahead (15 November – 19 November 2021)As U.S. inflation has surged to the highest level in over thirty years, inflation is likely to remain in focus in the coming week with investors looking ahead to the latest U.S. monthly retail sales figures along with earnings results from major retailers, including $WMT (Walmart). With $SPX (S&P 500) erasing its weekly losses from Friday’s late week rally, the bearish Rising Wedge formation of $RSP (S&P 500 equal weight) remains in play. Attention has being turned towards small-cap companies after a nine month consolidation breakout on $IWM (Russell 2000), setting a potential new leg of multi month long market rally leading by this companies. It is worth to note that $GLD (Gold) have also broken out of a multi month long trendline resistance, gaining +2.71% as the leading asset class of the week. China will provide an update on the economic recovery via industrial production and retail sales and wide there are expectation for a slowdown in its economic recovery, just as Europe is experiencing a fresh surge in Covid-19 infections. Here’s what you need to know to start your week. Market Technicals $SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) The benchmark index $SPX retraced with a weekly loss of -0.31% (-14.68 points) confirming last week’s highlight on the over-extension of this rally which was 200% ATR away from its short term moving average, the first time since September 2020. With $SPX reducing its intraweek losses with Friday’s +0.72% gain, it is worth to note that $RSP (S&P 500 Equal Weight) has yet to break its Bearish Wedge Formation, which was has already played out in $SPX. The upwards consolidation of $RSP may be reflecting signs of fatigue, signaling downside potential of $SPX in near term. The immediate support to watch for $SPX this week is at 4,645 level, a break of its short term pivotal level. U.S. retail sales The highlight of the week’s economic calendar will be October retail sales data, due out on Tuesday, with economists expecting an increase of 1.1%, after a 0.7% rise in September. U.S. inflation has surged to the highest level in over thirty years amid a global supply chain crunch and data on Friday showed that consumer sentiment fell to its lowest in a decade this month, as higher prices eroded living standards. Investors are betting that the Federal Reserve will have to raise interest rates sooner than currently indicated to stop inflation spiraling upward. Retail earnings Third quarter earnings season is continuing to wind down, but investors will get an additional update on the strength of consumer spending this week with results from major retailers, including Home Depot ($HD), Walmart ($WMT), Target ($TGT), and Macy’s ($M). The earnings reports will face extra scrutiny ahead of the start of the holiday shopping season, with investors looking at guidance from retailers to determine whether inflation will eat into profits or be passed on to consumers. Third quarter earnings season has largely been upbeat. 459 of the companies in the S&P 500 have reported with 80% of earnings results beating analysts’ forecasts. China slowdown The recovery in the world’s number two economy is weakening and data on Monday, which includes reports on retail sales, fixed asset investment and industrial production is expected to confirm this. The loss of momentum in China, a key driver of global growth, is casting a shadow over the uneven global economic recovery from the pandemic. The recovery in China has been hit by an aggressive approach to containing Covid-19 outbreaks, a massive debt crisis in the country’s real estate sector and an energy crunch that has weighed on manufacturing activity. Analysts think the country’s central bank is likely to take a cautious approach to loosening monetary policy to bolster the economy as slowing growth combined with soaring inflation fuel concerns over stagflation. Meanwhile, U.S. President Joe Biden is to hold a virtual meeting with Chinese leader Xi Jinping on Monday, amid rising tensions between the world’s two largest economies. Pandemic resurgence hits Europe Europe is seeing a resurgence of the Covid-19 pandemic, adding to headwinds for the region’s already fragile economic recovery. Europe accounts for more than half of the average 7-day infections globally and about half of latest deaths, according to data compiled by Reuters, the highest levels since April last year when the virus was at its initial peak in Italy. Several countries, including the Netherlands, Germany, Austria and the Czech Republic are implementing restrictions or planning fresh measures to slow the spread. Holland entered a three-week partial lockdown on Saturday, the first in Western Europe since the summer. Germany reintroduced free Covid-19 tests on Saturday and Austria is to decide on Sunday whether to impose a lockdown on people who are not vaccinated.
AMEX:RSP
by jfsrevg