Equities ended the week on a positive note, the SPX settling +30pts (0.9%) to 3477, which made for a net weekly gain of +128pts (3.8%). Meanwhile, WTIC cooled by -59cents (1.4%) to $40.60, but that still made for a net weekly gain of +$3.55 (9.6%).
sp’weekly1b
WTIC weekly
Summary
sp: a second consecutive net weekly gain. Perhaps most notable… weekly downside momentum – which stalled just above the key zero threshold, is starting to tick back upward again.
I would expect a divergent lower cycle high – relative to mid August, sometime by early November.
WTIC: a very powerful net weekly gain, but broadly… oil remains pretty stuck. Upside resistance.. 42/43… with support of the $36s.
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Dear Subscriber
It was a week for the bulls, as Tuesday afternoon’s ‘stimulus negotiations are over’ scare… has already been fully negated.
Some perspective…
SPX m1b
We’re seven trading days into the month, currently net higher by +114pts (3.4%). Monthly momentum continues to tick upward. Note the key monthly 10MA at 3143, which remains my m/t bullish/bearish line in the sand.
Meanwhile, over at Print Central…
The latest update showed a net weekly change of +$18.5bn vs -37.0 prior, taking the balance sheet to $7.075trn.
Its just a matter of time until stim’ bill 4 is passed, and the fed will be more than willing to buy another trillion or more of T-bonds. By definition, all such purchases will keep a bid on bonds… and pressure yields lower.
For now… NIRP is off the menu, unless the equity market implodes, and takes out all m/t supports (<3k to be decisive).
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I still see the precious metals and related miners, as the most straight forward mid/long term trade/investment. For now, I’m content to wait to chase with a little further upside… or to get involved after another wave lower.
As ever, feel free to message me via Disqus or email.
Sincerely, have a restful weekend, and goodnight from London
yours… cold
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The weekend post will appear Sat’12pm EDT @ https://tradingsunset.blogspot.com, and will detail five of the US equity indexes (monthly candle charts).