Even Stevens, Disney (2000)
or : Boomers looking at crypto traders, January 2022.
The last few weeks have seen the start of a relief rally, as expected. However, the week ahead will provide the tell as to whether it can last for another 10% or if it will follow the pattern of the last few and run out of steam at the current level.
The time is ripe for a larger bounce, with the next leg down coming at some point late August/ early September.
This is still the market of the previous Bull’s leaders and they’ll take a while to give up the ghost. The likes of Facebook could have a 70% rally and still be rolling over. Even juggernauts like Apple could continue their rally for another 10% or so to re-test breakdowns before heading lower.
Apple daily:
However, the market continues to be sick longer term. I’m bored of the Bear and would love to start finding stocks to get long but each week, looking through the spreads and indicators, it just says: stay away, I need to wash more out.
Sunday Twitter Poll
FinTwit is within a % either way - no strong opinions.
(Of the last 18,000 tweets containing SPX, $SPY or $ES, those including bull/bulls/bullish/bear/bears/bearish extracted, then % totals of each. Started April 2022; plan to track % of times Twitter is correct compared to the following weekly close. Tracking data will be added after the first 20 weeks.)
Roadmap
Wednesday - European and US inflation data, also Bank of Canada rate decision.
Friday (early) - Chinese GDP
Friday - US Retail Sales
There’s a lot of focus on the US consumer - if they start showing that inflation is pinching, expectations will be that the US economy has further slowing to go.
Equities:
Tough to get in on now, but the 2021 low gave a good long trade for a bounce a few weeks ago. A tickle above the 4k mark is an obvious target but a ‘real’ bear market rally will see 4400 and get everyone thinking they missed the low.
SPX daily:
FX:
DXY is conquering all, and the Euro gave up the ghost with its abysmal trade balance biting due to energy prices. A nice turnaround on Friday means the 2017 lows are in for a re-test.
The break of these was the first chance of an asymmetrical long in this run down.
Precious Metals:
Sold off well over the last few weeks. Sitting on the sidelines has paid off, although silver is at a decent level - it either holds here or hits $16 again.
Silver weekly:
Trades Update
This has moved to a free Thursday trades record, also available (most weeks) on Substack:
Risk Index
Under 50 = bullish, over 70 = bearish, over 90 = potential correction within 6 months
The Risk Index is a combined read of the trends of 68 intermarket spreads and indicators, from credit spreads to car sales in Spain.
Note that the current bear market was signalled 10 months ago (see reference down the bottom of this post at start of this year here) so the expectation is that the Risk Index will become increasingly bullish the longer this move down lasts.
1-year lookback:
Credit spreads looked slightly healthier to end the week, which should help a short term bounce.
Themes to Watch
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