Equities ended a bearish week on a bearish note, the SPX printing 4047, if recovering to settle -0.3% to 4079, which made for a net weekly decline of -0.3%. Meanwhile, WTIC settled -$2.19 (2.8%) to $76.55, which made for a net weekly decline of -$3.17 (4.0%).
sp’weekly1b
WTIC weekly
Summary
SPX: a second consecutive net weekly decline, if only by -0.3% to 4079. The three most recent candles are all spiky on the upper side, indicative of bullish exhaustion. Weekly momentum subtly ticked lower, offering a provisional m/t cyclical rollover. I’d note the 10MA at 3978.
For confidence, bears need a decisive weekly settlement <3950.
Bulls need to clear this week’s high of 4159 to have renewed hope of the 4200/300s. The latter looks overly difficult.
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WTIC: the third net weekly decline of four. Momentum remains fractionally positive. For confidence, the bulls need >$83s. I see the bigger threat of a hyper spike… on a geo-political upset, and still see oil and the related energy stocks as the very last thing to be short.
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Dear Subscriber (or guest!)
Some perspective…
With six trading days left of February, the SPX is currently +2.5% (0.1%) at 4079. Monthly momentum is ticking upward, but remains negative, and is still a restraint on every rally.
The February candle is a little spiky on the upper side, as the bulls are increasingly tired, after a five month ramp from the Oct’ low of 3491. I’d note the 10MA at 3953, which we’re still comfortably above.
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#crazytalk… aka… sp’weekly3b
First, I’d note that this week did settle with a blue Elder candle. Its supportive that 4195 is a key high, but its nothing decisive. For that, we need to see a red candle!
Considering the macro and geo-political situation, I have to seek a basic downside target of 3K. Even that couldn’t be deemed ‘crashy’, as it would just be another stair step lower.
All it will take to get to 3K is some degree of economic slowdown, and for inflation to start ticking upward… if only to the 7s. It doesn’t require any of the scary ‘wild cards’ to occur.
We could expect at least one or two of the wild cards to play out this year. Primarily, I’d look to Ukraine/Russia. A secondary would be a European financial blowing up – Credit Suisse comes to mind.
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The long weekend
A three day break is most welcome! I’ve sideline entertainment via Gold Rush, The Last of Us, and maybe a movie or two. I’ll vainly hope I find the energy to work on a few of my personal projects.
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 six of the US equity indexes (weekly candle charts).
*the next scheduled post on this page will be the pre-market brief, 8.30am, Tues’ Feb’21st.