• 100 days Could Crypto Overtake Traditional Investment?
  • 105 days Americans Still Quitting Jobs At Record Pace
  • 107 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 110 days Is The Dollar Too Strong?
  • 110 days Big Tech Disappoints Investors on Earnings Calls
  • 111 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 113 days China Is Quietly Trying To Distance Itself From Russia
  • 113 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 117 days Crypto Investors Won Big In 2021
  • 117 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 118 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 120 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 121 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 124 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 125 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 125 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 127 days Are NFTs About To Take Over Gaming?
  • 128 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 131 days What’s Causing Inflation In The United States?
  • 132 days Intel Joins Russian Exodus as Chip Shortage Digs In
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Odds Favor Further Downside in Stocks and Commodities

In the very short-term, risk assets have negative alignment of the fundamentals and technicals. Concerns about excessive debt in Ireland seem to be moving toward a band-aid resolution, but the market could turn its attention to Spain or Portugal in short order. From a technical perspective, we have short-term MACD sell signals on the daily charts of the S&P 500, gold, silver, copper, and the euro. We have short-term MACD buy signals on the daily charts of the U.S. dollar and the VIX. There is very little conviction behind the move in the VIX, which means risk assets could still surprise on the upside, especially if the S&P 500 can hold above 1,195 on a closing basis. If we see a close below 1,195, the chart below shows some areas to watch on the downside.

S&P 500 Chart

The early caution flags for the current pullbacks in stocks, precious metals, and commodities came from the currency markets. In the October 11th post, U.S. Dollar Could Rally in Coming Weeks, we outlined concerns about record negative sentiment toward the greenback. We were also concerned about support levels relatively close by for the dollar. The dollar has now rallied over 4% from its November low, putting downward pressure on stocks, gold, silver, and copper.

On November 9th, in the Dollar, Euro, Gold, Silver, and the VIX are Poised for Reversals, we outlined numerous concerns related to the elevated odds of short-to-intermediate term reversal of the "risk-on" trade. The elements remain in place for a market correction.

The CCM Bull Market Sustainability Index (BMSI) has not made a new high since Monday. More importantly, the CCM 80-20 Correction Index has not made a new high since October 8, 2010. Both occurrences are indicative of a weakening market - both have raised yellow flags for the bulls. Our concerns outlined on November 4th in Debt Concerns Could Dampen Inflation Trade still apply. We believe the Fed's quantitative easing program (analysis) will help push asset prices higher (QE investing resources) in the intermediate-term, which may occur after a correction of 3% to 5% from the recent peak in the S&P 500.

 

Back to homepage

Leave a comment

Leave a comment