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Commentaries & Views

S&P 500 bulls took the opportunity yesterday amid mild credit market support. Looks like more fireworks are to come – the risk-on turn is merely starting. Not only financials, but also tech welcomed higher yields – it seems that the positive seasonality of 2nd to 3rd week of Feb, is working. We have quite a way to go still on the upside – 4,600s are waiting, and it remains to be seen how far in the 4,600 – 4,700 range stocks make it.

Consumer discretionaries are outperforming staples, and energy isn't cratering – the brief commodities reprieve (don't look though at copper, which seems preparing a nice upside move, or crude oil's shallow dip) supports the stock market advance. Precious metals are rising strongly – both thanks to inflation expectations not budging much, and the expected copper upturn. Not even cryptos are plunging. The open S&P 500 and oil profits can keep on rising.

Looks like the markets are slowly positioning for yet another hot inflation number tomorrow. How many times lately have there been expectations that high CPI data would sink stocks – but these rallied instead? Thursday is likely to turn out similarly – I'm not looking for the stock market rally to top out tomorrow. The Mar FOMC is still quite a few weeks away, 50bp rate hike fears notwithstanding.

Let's move right into the charts (all courtesy of

S&P 500 and Nasdaq Outlook

S&P 500 bulls have made the opening step, and look ready to extend gains. Even volume has returned a little, but importantly, sellers were nowhere to be seen – and that'll likely be the case today as well.

Credit Markets

HYG couldn't keep the opening gains, but junk bonds still did better than their quality counterparts. Anyway, the HYG weakness looks likely to be reversed (to some degree) today.

Gold, Silver and Miners

Precious metals are firmly on another upleg – and miners strength is confirming that. When inflation turns out more stubborn than generally appreciated, and bond yields don't catch up nearly enough, precious metals would like that. Love that.

Crude Oil

Now, crude oil bulls did pause, but the dip isn't likely to reach too far – I still wouldn't count on pullback towards $88 or lower really – this correction is more likely to be in time than in price.


Copper is clearly refusing to decline – its upswing looks to be a question of shortening time only. Likewise the commodities reprieve would be reversed shortly. The red metal's price action coupled with precious metals one, is very nice to see – for the fruits it would bring.

Bitcoin and Ethereum

Cryptos aren't weakening – they look to be pausing in the upswing only. How long would they need to consolidate before continuing the attempt to go higher?


S&P 500 bulls have a firm grip on higher prices – we're looking at another green day today. And if it's accompanied by the turning bonds, then all the better. Tech has risen, oil is a little down while sectoral breadth improves – the conditions are in place for S&P 500 to overcome 4,600. The risk-on rally hasn't yet run out of time, and the Mar FOMC is still far away. Upgraded rate hike prospects are being increasingly absorbed by the markets, and stocks don't look spooked at the moment. The bears' time would still come though, but let's first enjoy the gains our timely positioning is bringing.

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