Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Sucking in Buyers

Stock-Markets / Stock Market 2023 Apr 18, 2023 - 09:26 PM GMT

By: Monica_Kingsley

Stock-Markets

S&P 500 bears missed a good intraday opportunity after winning for 6 hrs in the regular session. For all the market breadth limping along, it was Russell 2000, financials and industrials with materials that did well, no matter what energy, precious metals and cryptos see on the horizon.

Bearish divergencies in advancing-declining issues, new high-new lows, even merely stocks above the 50-day moving averages in S&P 500 and Nasdaq – amply described yesterday together with earnings, job market and manufacturing (LEIs) data ahead, haven‘t invalidated the medium-term bearish case for stocks. For all the shrinking liquidity talked, this rally is proceeding – sell in May and go away“ seasonal effect would be weaker than usual.

(…) Disruptive tech (AI driving semiconductors) remains well placed. … So, we have tech stocks to outperform value in the current low growth environment, would the thinking go, however if you check market breadth in Nasdaq, the bearish divergence in the making is even worse than in S&P 500. It‘s the big names and semiconductors holding it up, while advance-decline line and new highs-new lows are largely struggling.



Don‘t forget the (some 3 months ahead) debt ceiling impasse – Treasury is thus far drawing down its General Account at the Fed (what was $355bn early Mar is only $113bn now), while the Fed is shrinking its balance sheet, and at the same time deposits from both small and big banks are going to money market funds and similar.

M2 continutes declining, LEIs are firmly negative, ISM manufacturing at 46 is the average of when recession has been declared (in my opinion, recession though isn‘t here yet still thanks to most consumers still going through the excess savings – and that‘s delaying the onset), and the deposit outflows make for less commercial credit expansion possibilities. Real estate likewise hasn‘t bottomed yet – neither commercial nor residential (and that would weigh on both banks and consumers), job market is sliding as per my schedule, and earnings estimates for the overwhelming majority still to report, seem likewise too optimistic to me still.

While we‘re getting disinflation (that‘s what‘s spurring the greatest disconnect threatening stocks), it‘s the headline figure driven by retreating energy – this though has stopped being the truth regarding oil – yet core inflation (both core CPI and core PPI) don‘t mirror that optimism.

As I have stated in late 2022, the Fed is trying to avoid the 1970s mistake of not attending to inflation expectations (as these risk becoming unanchored), hiking too fast, causing a recession, and having to cut. This time, Powell is determined to go slow, and keep rates restrictive, slightly restrictive in a bid not to cause recession, even if the Fed (correctly and not only for this reason) acknowledged recession risks in 2H 2023 as sharply up thanks to the spring banking crisis.

All of this combined translates into what I told you a week ago – USD relief rally, a few points‘ upswing coinciding with risk-off turn in the markets, is approaching as much as the talk of dollar double bottom. It had already sent precious metals packing Friday – but my 2023 star pick of PMs remains unchanged, but we‘re likely to correct first before overcoming gold highs as it becomes later in 2023 obvious that the Fed would have to step up to the plate and start buying assets again.

For now though, as the first tweet in the European morning and the following one argue, the buyers still have some time to close finally above 4,188 (likely today, not an isolated instance), but I doubt that 4,257 can be sustainably broken above. This struggle above 4,188 would be enough to convince the last doubters that a new bull market is born – if it sticks around till the end of the month.

Keep enjoying the lively Twitter feed via keeping my tab open at all times – on top of getting the key daily analytics right into your mailbox. Combine with Telegram that never misses sending you notification whenever I tweet anything substantial, but the analyses (whether short or long format, depending on market action) over email are the bedrock.

So, make sure you‘re signed up for the free newsletter and that you have my Twitter profile open in a separate tab with notifications on so as to benefit from extra intraday calls.

Let‘s move right into the charts (all courtesy of www.stockcharts.com).

S&P 500 and Nasdaq Outlook

4,209 is the nearest weak resistance, but we‘re to see consolidation around 4,188 first. The momentum from yesterday still points higher, especially if tech catches up and we see a modest rotation into growth stocks including semiconductors. No matter how these are lagging lately relatively speaking, they‘ll remain among the better performing pockets of the market in 2023.

No time for a broad stock market downswing – rising unemployment claims Thursday would help, but undershooting PMIs Friday (nothing unachievable), would help totally. Till then, it‘s still a grind to convince that it‘s „safe“ to buy the dips before more of the earnings announced start spoiling the picture.

Gold, Silver and Miners


Precious metals correction is firmly here, and merely starting. Look at crypto as well confirming the stiffening headwinds. All eyes on Fed tightening and yields rising again (rising within a certain range for 2023 – in 10-y below 4% and above 3.25%, that‘s its range).

Thank you for having read today‘s free analysis, which is a small part of my site‘s daily premium Monica's Trading Signals covering all the markets you're used to (stocks, bonds, gold, silver, miners, oil, copper, cryptos), and of the daily premium Monica's Stock Signals presenting stocks and bonds only. Both publications feature real-time trade calls and intraday updates.
While at my site, you can subscribe to the free Monica‘s Insider Club for instant publishing notifications and other content useful for making your own trade moves.
Turn notifications on, and have my Twitter profile (tweets only) opened in a fresh tab so as not to miss a thing – such as extra intraday opportunities. Thanks for all your support that makes this great ride possible!

Thank you,

Monica Kingsley

Stock Trading Signals

Gold Trading Signals

www.monicakingsley.co

mk@monicakingsley.co

* * * * *

All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in