Equities ended the week on a broadly weak note, the SPX settling -32pts (0.7%) to 4327, which made for a net weekly decline of -42pts (1.0%). Meanwhile, WTIC settled -9cents (0.1%) to $71.56, which made for a net weekly decline of -$3.00 (4.0%).
sp’weekly1b
WTIC weekly
Summary
SPX: A significant net weekly decline, but that is from a new historic high of 4393. Indeed… lets keep things in perspective, as whilst the s/t setup does lean to further cooling to (ideally) the 4250/40s, there is ZERO justification for any crash calling chatter, which I’m still seeing from the usual suspects. There is no reason not to expect the 4400s, or even the 4500s by around Labor day.
WTIC: a second net weekly decline for oil, but that is after a major ramp from the $57s to $76s. S/t vulnerable, with support of psy’70/69s, and then 67/66s.
Eventual price action >$77.00 will be decisive, and offer giant psy’ $100. No doubt, the mainstream and Print Central itself will deem that as ‘transitory’. Things would only get ‘spooky’ above the 2011 high of the $114s.
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Dear Subscriber
Whilst it was a week for the bears, anyone getting overly twitchy needs to go stare at the following for a good thirty minutes or so…
Indeed, we printed a new hist’ high of 4393 just a few days ago, and we’re currently net higher for a sixth consecutive month.
I would note the 10MA at 3915, and that will be offering support in the 4000s in August. Best guess… s/t cooling 4250/40s, then the 4400/4500s into early Sept’. A correction of >10% is due… perhaps a little more fierce than that, if the fed panic, and raise rates if core CPI >6%.
Speaking of Print Central…
The latest update showed a net weekly change of +$103.9bn vs +$19.2bn prior, taking the balance sheet to $8.202trn.
The fed are now in the process of trying to get the market used to the notion of looming QE taper. Its possible, if not probable, that QE will be reduced to zero by year end.
Further, rate hikes are on the menu, whether late this year, or by spring 2022. My best guess is that the fed will ‘break’, once core CPI (currently 4.5%) is >7.0%. There is increased mainstream acceptance that we might even see headline inflation (currently 5.4%) >10.0% by year end.
I would note that yield curve controls are one further policy the fed might implement, but its not that important relative to QE and interest rates.
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C19 chatter…
Frankly, there is so much I could highlight, but this is pleasantly short…
As expected, the unvaccinated are being increasingly blamed for the pandemic. If I’m right about C22, or whatever ‘they’ will decide to call it, the initial reaction will be to want to execute all those who resisted the vaccines/treatments.
I say initial, as eventually – although it sometimes takes decades, even a few centuries, the truth will come out.
*special note, for the new people…
Let me note that I’m actually very bullish biotech. I’ve a laundry list of upgrades to my system code (DNA), that I’d gladly like to change/improve, but I’ll only do that if such drugs/treatments have been tested across the better part of a decade.
The ongoing push for mRNA treatments is reckless, not least in terms of no longitudinal data. Further, the fact such vaccines/treatments are now being pushed to the young is ludicrous. There is effectively zero risk from C19 to the young, whilst there are known risks, and unknown (long term) risks, from the vaccines. Risk/reward ratios matter!
Further, I’d die to protect your gods given right to choose what medical care you want for yourself and your family. All I ask… don’t put your choices onto me!
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The weekend
Yours truly is damn tired, and I need considerable rest! Next to my bed remains desktop’2… still to be configured for web streaming.
I’m still waiting on news regarding two lawsuits I’ve filed. That remains a drain on my ‘spirits’, you could say. Perhaps my tier’1 garbage landlord, and their equally awful heating contractor will offer ‘reasonable’ out of court settlements?
In any case… its time to rest.
As ever, feel free to message me via Disqus or email.
Sincerely, have a restful weekend, and goodnight from London
yours… Philip
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The weekend post will appear Sat’12pm EST @ https://tradingsunset.blogspot.com, and will detail five of the US equity indexes (weekly candle charts).
re: Twitter. I might keep Saturday ‘light’, but I will appear late Sunday to take a look ahead to earnings, of which there will be many!