It was a bullish month for equities, SPX +138pts (3.1%) to 4588, with the Transports +1086pts (7.0%) to 16616. WTIC gained +$11.16 (15.8%) to $81.80. Copper climbed +25 cents (6.6%) to $4.01. The USD weakened by -96bps to DXY 101.63. The US 10yr yield +16bps to 3.97.
SPX, monthly
The eight monthly gain of ten, settling powerfully higher, with a new cycle high of 4607. Momentum ticked upward, settling marginally positive. Another close above the key 10MA (4133), as the m/t trend remains bullish. Upper monthly bollinger offers 4744, although a key daily trend offers very strong resistance at 4620.
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Trans, monthly
A second consecutive net monthly gain, having effectively already met the upper the upper bollinger. Momentum settled the month net positive.
WTIC, monthly
A second consecutive net monthly gain. The July settlement above the key 10MA ($77s) is decisive, and concludes the m/t bearish trend. I’d note the upper bollinger in the $111s. Soft resistance are the $83s, and then giant psy’ $100.
Copper, monthly
USD, monthly
The king of FIAT land weakened for a second consecutive month, with an intra month low of 99.22, if recovering to settle at 101.63. The spike on the lower side from around the key psy’100 threshold is one good sign for the dollar bulls.
I’d note the key 10MA in the 103s. Bulls need to see August settle >104s, but really… its been a year of broad chop. For now, the dollar doomers have nothing to tout.
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US 10yr yield, monthly
Whilst the US 10yr failed to break AND hold above psy’ 4.00%, it wasn’t a necessity for the bond bears. I’d especially note momentum, which has leveled out, just above the key zero threshold.
Any price action >4.10% will be decisive, offer basic target of 4.70%, with secondary of psy’5.00%. A grander target would be 7%, and whilst you could call it crazy talk, Dimon of JPM (some months ago) argued rates might get that high.
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Looking ahead
Tuesday will see PMI/ISM manu’, JOLTS, construction
Earnings: NCLH, UBER, PFE, CAT, EPD, MRK, JBLU, SPWR, MO, AMD, DVN, SBUX, PINS, ELF, SEDG, PXD, LUMN, SPCE
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Final note
Today saw considerable chop… much as expected. We could do this for a few more days, although I’d kinda looking for a foray back into the low 4600s. Big earnings from Apple and Amazon are clearly going to be important, but the market should be equally focused on multiple sets of jobs data.
Yours truly remains content to mostly watch. I’ll hope for a run to 4610/20, which would make for a reasonably comfortable short. Again though, I’m super cautious, and I’ll be content if I can capture 15/20pts on any cooling wave.
There is background chatter on many of the wild cards, not least China/Taiwan, C19-excess deaths, and Ukraine/Russia. Ohh, and whether the Fed will manage a soft landing, or if it will end badly. It always ends the latter way though, right.
I’ll hope August offers some dynamic price action, if only to allow me to write something other than ‘chop chop’. Even a 5% cooling wave would be something, but that seems a stretch this side of Labor day.
Goodnight from London