It was a bullish month for equities, SPX +127pts (2.9%) to 4522, with the Transports +200pts (1.4%) to 14661. WTIC fell -$5.45 (7.4%) to $68.50. Copper cooled by -11cents (2.4%) to $4.38. The USD strengthened by +45bps to DXY 92.64. The US 10yr yield climbed by +6bps to 1.30%.
SPX, monthly
Trans, monthly
WTIC, monthly
Copper, monthly
USD, monthly
US 10yr yield, monthly
Summary
Equities: The SPX climbed for a seventh consecutive month, breaking yet another new historic high of 4537. Monthly momentum ticked upward, RSI 78s is on the very high side. Whilst the Transports didn’t perform as well, it still managed a significant gain. Bulls could argue the latter has price structure of a bull flag.
WTIC/copper: oil printed the $61s, but recovered to settle in the $68s. Still m/t bullish, as the key $77 threshold should be cleared within 1-3mths. Copper printed $3.96, but also recovered to $4.38. I’d note the August candle is very spiky on the lower side, indicative of bearish exhaustion. A push to psy’ $5.00 appears an eventuality.
USD: the dollar broke a new high for the year of 93.75, if cooling back to settle moderately higher at 92.64. This was the third monthly settlement above the key 10MA, and the short/mid term trend is technically bullish. Momentum ticked upward, and is prone to turning positive in September.
Clearly, any dollar strength is inherently bearish for most asset classes. However, so long as the upward trend doesn’t accelerate, it could be argued we have a cyclical setup like summer 2018 or late 2011
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Bonds/yields: the first net monthly gain in yields since March. Price structure is a valid bull flag. Natural upside target is 2.25%. So long as the trend is relatively slow and steady, the equity market won’t much care.
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Looking ahead
Wednesday will see ADP jobs, PMI/ISM manu’, construction, vehicle sales, EIA Pet’
Earnings: CPB, CHWY, SWBI, OKTA, FIVE, VEEV, NTNX
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Final note
As the failed state of Australia is set to be blockaded, some advice from a US trucker to the Aussies…
Sounds like a great idea, I hope they are listening!
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It might be nothing…. or it might be something, but it definitely merits noting.
Goodnight from London