It was a bearish month for equities, SPX -250pts (5.3%) to 4515, with the Nasdaq comp’ -1405pts (9.0%) to 14239. WTIC soared +$12.94 (17.2%) to $88.15. Copper cooled by -14cents (3.1%) to $4.32. The USD strengthened by +94bps to DXY 96.54. The US 10yr yield climbed by +27bps to 1.79%.
SPX, monthly
Nasdaq comp’, monthly
WTIC, monthly
Copper, monthly
USD, monthly
US 10yr yield, monthly
Summary
SPX: a rough January, the most bearish month since March 2020. January’s candle is shy of being bearish engulfing, and neither did it settle under the 10MA. For now, the m/t trend is still bullish. Momentum ticked lower, and at the current rate will be prone to turning negative late Feb’/early March. An eventual monthly settlement under the 10MA will offer natural target of the lower monthly bollinger… currently around 3000.
NAS: a rather severe monthly drop of -9.0%. The January candle settled under the monthly 10MA, for the first time since March 2020. The m/t trend has turned bearish, as momentum settled marginally negative. Big target is the lower bollinger… around 10K.
WTIC: an extremely bullish month, printing $88.84, the highest since Oct’2014. S/t vulnerable with the main market, but broadly… there is zero sign of a m/t top, as giant psy’ $100 still looks on track by late spring/mid 2022. Higher energy prices won’t help the broader economy, and will only pressure upward general inflation.
Copper: a choppy start to the year, broadly stuck since summer 2021. Momentum is prone to turning negative in February. Alarm bells if psy’ $4.00 is lost, which would offer psy’ $3.00.
US 10yr: bond yields climbed for the fifth month of six. Natural target remains 2.25%. The only reason not to expect this to occur would be if a main market collapse, and if the US economy is borderline/outright recessionary.
USD: printing 97.44, the highest level since July 2020. The January candle is notably spiky on the upper side, from resistance of the upper monthly bollinger. M/t bullish, and that only changes if back under the 10MA… currently 93.50.
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Looking ahead
Tuesday will see PMI/ISM manu’, JOLTS, construction spend’
Earnings: XOM, UPS, SIRI, AMD, PYPL GOOGL, GM, SBUX, GILD, EA, MTCH
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Miscell’ chatter…
There is considerable background chatter about food shortages, but also how China is hoarding, arguably in anticipation of conflict with the west. None of the mainstream media want to cover such a story, as they’d be concerned of inspiring ‘fear’ in the sheep.
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The following is ‘unconventional’, and I understand if its not to your taste. If you get can get past the first 2-3 minutes though…
These two guys have been providing really good independent reports on China for some years. What is clear… Communist China remains absolutely paranoid of ‘foreigners’ getting to see anywhere outside of the major cities, not least in terms of absolutely horrific environmental standards.
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Here is another unconventional independent…
I don’t agree with everything, but the notion of having reserves in case of war, societal panic, or just plain supply side shortages, can’t be over-stated. The guy does represent many of the preppers out there, and whilst nothing ‘major’ might happen this year… I certainly endorse having reserves.
Goodnight from London