SP500 Index – 05 July 2021
Update on long term trend on SP500 index.
The market has broken the resistance at 4270 – 4290.
We think the market should edge higher toward the area between 4507 and 4534 (see resistance levels on chart).
Update on long term trend on SP500 index.
The market has broken the resistance at 4270 – 4290.
We think the market should edge higher toward the area between 4507 and 4534 (see resistance levels on chart).
Thursday was a day marked by positive sentiment on equity markets (yet another record high on Wall Street), amid a return to cyclical stocks on the back of good macro data. Nonfarm unemployment claims fell to their lowest level since the start of the pandemic, raising expectations for labour market data (June new jobs, wages and unemployment) due out today.
OPEC+ discussed a potential roll back in current cuts for about 500,000 barrels a day. The organisation has delayed preparatory talks between ministers by a day to give more time for compromise before a critical meeting.
Brent hit its highest since 2018 in a context where tight market signals continue. US inventories fell for the fifth consecutive week, Chinese inventories appear to be at their lowest of the year.
After last week’s strong sell-off, we saw a classic technical rebound across markets yesterday in the absence of any major macro data.
Iran said key differences remain with world powers over restoration of their 2015 nuclear deal, and called on the U.S. to “rectify what it’s done in the past” in order for talks in Vienna to progress.
On daily, we signal strong support around 4170 on daily charts. If broken the market can go as down as 4080.
DEMARK bearish (sell signal at 4240).
We signal, as well a very important divergence between indicator and price that usually is a bearish signal.
On Wednesday we saw the biggest euro fall since April 2020. Indeed the Euro fell as much as 1.1% to 1.1994 per dollar, right after policymakers reported that the Fed will raise interest rates twice by the end of 2023.
With new inflation estimates, the ECB confirmed its position on the temporary nature of the phenomenon in 2021. By confirming those figures for 2023 at 1.4%, kept the “hawks” within the Governing Council in check at least for now. As far as the ECB is concerned the view will be to the Strategic Review in September. It was the insistence on the transitory nature of inflation that led to the fall in government bonds’ rates. It peaked shortly after the publication of the US CPI.
We think that gold can EDGE HIGHER FROM THESE LEVES.
The resistance at 1880 has been broken and the market is trading above this level.