For the sixth consecutive day, the market revisited the 1333-1336 area, only to be summarily rejected and sent packing to lower levels, coming within a few ticks of filling the aforementioned gap and testing the 50% retracement level (1300-1337). This of course leaves us wondering, “ Are the bears finished, or is there more to come?” In any event, the bears must certainly feel emboldened after today’s performance, as they head into next week’s earnings season, options expiration, and CPI report.
Meanwhile, the dollar continued it’s descent and closed near the 75.00 level, while bonds found support near the monthly S1, and in what may be considered a very liberal interpretation of an inverted H&S formation, may be hammering out a short term bottom.The bulls meanwhile, might be starting to doubt themselves with crude topping $113.00 a barrel, gold reaching 1475.00, and the CRB index making new all time highs.
If bonds firm up and accept, and rates fall while the Fed maintains it’s near ZIRPolicy, then equities and commodities will still make sense to own from an asset allocation standpoint (for the near term), and barring any surprise disappointments in earnings, the market should make new material highs next week. Technically, the market is very strong across all time frames. Price has been in a virtually linear advance since last July, and is now hovering just below the next Fib level (see chart above). Since the post crash bottom was made in 2009 price has been turning at major Fibonacci retracement levels, and a break above that level would be near term very bullish, with little to no resistance clear on up to the 2007 top. But, on the other hand, a turn down from that Fib level would mark the end of this uptrend.
Meanwhile, the dollar continued it’s descent and closed near the 75.00 level, while bonds found support near the monthly S1, and in what may be considered a very liberal interpretation of an inverted H&S formation, may be hammering out a short term bottom.The bulls meanwhile, might be starting to doubt themselves with crude topping $113.00 a barrel, gold reaching 1475.00, and the CRB index making new all time highs.
If bonds firm up and accept, and rates fall while the Fed maintains it’s near ZIRPolicy, then equities and commodities will still make sense to own from an asset allocation standpoint (for the near term), and barring any surprise disappointments in earnings, the market should make new material highs next week. Technically, the market is very strong across all time frames. Price has been in a virtually linear advance since last July, and is now hovering just below the next Fib level (see chart above). Since the post crash bottom was made in 2009 price has been turning at major Fibonacci retracement levels, and a break above that level would be near term very bullish, with little to no resistance clear on up to the 2007 top. But, on the other hand, a turn down from that Fib level would mark the end of this uptrend.
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