It was a very bearish month for equities, SPX -346pts (8.4%) to 3785, with the Transports -1144pts (8.0%) to 13156. WTIC cooled -$8.91 (7.8%) to $105.76. Copper fell -59 cents (13.6%) to $3.71. The USD strengthened +270bps to DXY 104.46. The US 10yr yield +13bps to 2.98%.
SPX, monthly
Another lower high and lower low, settling under the monthly 10MA (4371), as the m/t trend remains bearish. I’d note the lower bollinger at 3550, and that will likely adjust/jump to around 3600 as of the Friday July 1st open. A foray (if brief) <3500 appears probable, and I’d look to the Feb’2020 high of 3393… which does look within range mid/late July.
–
Trans, monthly
A lower high and lower low… settling under the monthly 10MA, as the m/t trend is bearish. In theory, sustained high fuel prices, increased staffing costs, and an increasingly cash-strapped consumer, should hit the transports harder than almost any other sector.
WTIC, monthly
Oil printed $123.68, if cooling back to settle in the $105s. Whilst its a rather powerful net monthly decline, the m/t trend IS bullish. I’d only have concerns if psy’ $100 is lost, and more so… the $93s.
Copper, monthly
A third consecutive net monthly decline. The June candle is bearish engulfing, and is strongly suggestive of lower levels in July. Support $3.50, and then psy’ $3.00.
USD, monthly
The dollar printed 105.57, the highest since Dec’2002, if cooling back to the mid 104s. M/t bullish, as the door remains open to the 120s. Dollar doomers have nothing to tout until back under psy’100, where the monthly 10MA will be.
US 10yr yield, monthly
The US 10yr yield printed 3.49%, but cooled back into end month, settling at 2.98%. The June candle is distinctly spiky from what is a massively key price threshold. The bond bears should be concerned that we’ve a short, mid, and possible long term top.
If the Fed ‘back off’ – as seems probable with the Sept’ FOMC, then we might have seen yields print their cycle high.
–
Looking ahead
Friday will see ISM/PMI manu’, construction
Earnings: none.
Event: With Monday July 4th CLOSED for Independence Day, the preceding Friday will be inclined for subdued trading on very light volume, which (in theory) should favour the equity bulls.
–
Goodnight from London