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Bulls to get challenged

Commentaries & Views

S&P 500 has been rejected at 3,900, but is showing premarket fine resilience in light of the META disappointment – and AAPL is reporting today. Sectoral market breadth is simply improving, value and cyclicals are keeping stocks afloat no matter the coming tech earnings (that covers AMZN too) with their possible gyrations offering buying opportunities.

Bonds have retained risk-on posture even though HYG was somewhat rejected. The premarket positioning is cautious, with the dollar retracing a good deal of this week's decline – advance quarterly GDP data is unlikely to trigger a selloff in stocks. The sentiment today is though undeniably cautious as precious metals, commodities and cryptos reveal.

What's a clear warning sign for stocks short-term, is the combination of declining VIX and also the advance-decline line. While META didn't exert that much influence, the coming two days could test the bulls adequately – with still relatively fine incoming economic data postponing that challenge for later today and tomorrow. Make no mistake though, the horizon is slowly darkening while  silver followed by oil, copper first of all, and then gold with confirming miners, retain the highest medium- and long-term potential.

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