Stocks ended higher for the first time in three days, shaking off volatility from earlier this week. Still, the S&P 500 was on track to post a weekly loss and end a three-week winning streak, if levels hold through Friday’s close.

Fresh commentary from Federal Reserve officials remained in focus on Thursday, as another set of speakers offered a mixed set of commentary on the policy path forward for the central bank. St. Louis Fed President James Bullard said Thursday that he wanted the Fed to get to between 3% and 3.25% on the Fed funds rate in the second half of this year, implying more aggressive, front-loaded interest rate hikes in the near-term. Bullard was the only dissenter in the Fed’s March meeting, calling for a larger 50 basis point interest rate hike versus the 25 basis point hike that ultimately occurred.

However, other Fed officials offered a more measured approach to raising rates. In remarks Thursday, Atlanta Fed President Raphael Bostic said it would be “appropriate” to move the benchmark interest rate “closer to a neutral position,” suggesting a somewhat less hasty series of interest rate hikes. Meanwhile, Chicago Fed President Charles Evans suggested the Fed would be able to “get to neutral, look around, and find that we’re not necessarily that far from where we need to go.”

Taken together, the confluence of commentary at least temporarily helped stocks pause their latest bout of volatility from earlier this week, and kept Treasury yields steadier after a steep march higher. The benchmark 10-year yield held around 2.6% for its highest level since 2019.

The S&P 500 made a solid turn around after dropping to 4450, as it rallied to finish the session at 4500.21, up 19.06 points.  The S&P 500 is still in a pattern of lower highs and lower lows, and that will need to change to get at all bullish..

A month ago crude oil was $130, now it’s $96 – are we seeing a peak in commodity prices? Well, not according to JPMorgan, as they say commodities could surge by as much 40%, far into record territory, if investors boost their allocation to raw materials at a time of rising inflation. 

Housing bubble? Certainly based on the surge in searches of the topic, many are thinking so.

Stay tuned!

(From Yahoo)…Stocks rose while US crude oil prices fell for a back-to-back session amid signs of progress in Russia-Ukraine talks. Russia said it was easing military action in Ukraine’s capital Kyiv and northern city Chernihiv and was prepared to set a meeting between Russian President Vladimir Putin and Ukraine’s President Volodymyr Zelensky following a draft peace agreement.

The latest batch of US economic data offered a mixed picture on the state of the economy amid still-elevated inflation, ongoing geopolitical uncertainty and tightening monetary policy out of the Federal Reserve. Job openings held little changed at about 11.3 million in March, far outpacing new hires at 6.7 million to reflect persistently rampant labor supply shortages. And while the Conference Board’s latest monthly index showed a slight uptick in consumer confidence in March, the index remained below last year’s average. Plus, consumers’ one-year inflation expectations soared to an all-time high of 7.9%.

The S&P 500 has pushed through the 4600 level, which had acted as strong resistance, having held the two previous tests (red arrows). While this is a bullish move, if we look at the RSI at the bottom of the chart, we can see that it is now technically overbought, suggesting a pullback is likely soon.

A closely watched measure of the yield curve that serves as one of the bond market’s most reliable recession indicators inverted today. The  2-year/10- yield spread intermittently dipped below zero and is down from more than 160 basis points a year ago for 1st time since 2019.

Bitcoin has broken through its’ near-term resistance level that had held the previous three times it was tested (red arrows).  The world’s most popular cryptocurrency is up roughly 8% over the past two days to more than $47,000.

Last week, crypto investment products saw their highest inflows of the year, as well as their eighth positive week of the past 10 weeks.

Stay tuned!

(From Yahoo finance)…Stocks erased earlier gains to close mostly lower, with investors looking ahead to the Federal Reserve’s next monetary policy decision later this week amid an ongoing war in Ukraine and soaring inflation.

The Dow Jones Industrial Average erased earlier gains of as many as 451 points to end little changed by market close. The Nasdaq dropped 2%, and S&P 500 also turned negative as technology stocks came under renewed pressure. US crude oil prices  dipped below $103 per barrel to a two-week low, while the average price for gas at the pump held near a record above $4.30 per gallon across the US.

Meanwhile, Chinese stocks remained volatile as concerns over regulatory pressures and Beijing’s relationship with Russia rose further. According to reports over the weekend citing U.S. officials, Russia had asked for military support from China for the war in Ukraine. American depository receipts of major Chinese companies including Alibaba ), Nio and Baidu  slid in intraday trading, building on steep year-to-date losses.

The S&P 500 was down again today, now testing the previous low.  While technically we could see a reaction rally soon, such a move would likely be short-lived.  The index is seeing a series of lower highs and lower lows and until it can break out of that trend, the path to least resistance is down.

The university of Michigan posted its preliminary results of its March’22 Consumer Sentiment Survey and that figure was 59.70. Every time the survey has been this low, other than in 2011, the US economy fell into a recession (grey shaded areas indicate a recession).

Chinese tech stocks continue to slide and are now down over 73% in the past year.

As we have been highlighting to our premium subscribers, oil was extremely oversold and in the last few days has giving up over 21% of its gains.

The US 10-year up 7% today, to 2.15%, the highest level since July’19. The 10-year tends to drive mortgage rates, meaning we will be seeing mortgages rising soon.

Thinking of investing in government bonds?  While bond yields have been rising lately,  the Real Return (nominal yield minus inflation) is negative for most countries.  Here is a chart we update each week for premium subscribers and it shows that only Brazil and Mexico bonds deliver a positive return, all the others on the chart yield negative returns.  Canadian bond holders are losing 2.97% per year, US bond holders are losing 5.75% and Spanish bond owners are losing 6.37% per year.  If you invest in these bonds, you are guaranteed to lose purchasing power each year.

If you do not have a hedging strategy, seriously consider subscribing to Trend Technical Trader (TTT) which offers numerous hedging options. Note also, TTT includes the Gold Technical Indicator (GTI).

To ensure all readers have access to this hedge service, we temporarily reduced the price by $300. Click button below to subscribe. It’s your money – take control!

Stay tuned!

Stocks extended declines on Monday and oil prices soared as investors nervously considered the potential for even higher inflation and greater global economic damage from Russia’s war in Ukraine and sanctions that have ensued.

The S&P 500 closed down nearly 3% at 4,200.89, its worst day in more than a year, while the Dow fell 2.4% to 32,813.56. The Nasdaq Composite dropped 3.62% at 12,380.96 clocking in its worst day in more than a month, and formally entered a bear market after dropping more than 20% from its recent record high.

The S&P 500 has now dropped below the previous near-term support level and is testing our original call for support at 4200.

Gold has had a great run but is now getting technically overbought (see RSI at bottom of chart). Watch for a potential near-term pullback with support at 1885, then 1850.

Based on seasonality, gold is now entering negative period that typically runs to mid-late March

While investor’s focus has been understandably on the Russian invasion of Ukraine, there is another problem that is creeping up that most are not aware of…a recession. One of the best indicators that a recession is coming is the yield curve (the 10-year yield – 2-year yield).

On the chart below, inverted yield curves are identified by red arrows and we can see that when the yield curve inverts (10-year yield lower than 2-year yield) a recession always follows (grey shaded area).  As we can see, the yield curve has been heading lower since May of 2021 and if the Fed raises rates at their meeting next week, the yield curve could be inverted in the next few months.  And that means  a recession should follow.

Hopefully, you have taken our advise and established exit or hedging strategies. If you do not have a hedging strategy, seriously consider subscribing to Trend Technical Trader (TTT) which offers numerous hedging options. Note also, TTT includes the Gold Technical Indicator (GTI).

To ensure all readers have access to this hedge service, we temporarily reduced the price by $300. Click button below to subscribe. It’s your money – take control!

Stay tuned!