Last week I wrote that stock bulls had a weekly closing target of 4100 on S&P futures and they hit that level about 30 minutes before the close on Friday. I've noted that I think consideration should be given to whether a bull market is back on, if the descending trendline, going back to spring of 2022, is breached.
The below chart of the S&P shows that it clearly has happened, despite encountering resistance at that 4100 level. The question is whether the final upcoming 25 bp hike, now 100% priced, is the last before a pause will be a"sell the news event" in stocks. This could lead to a sideways churn for a while, with the October 2022 low intact as the market digests a pause.
A corresponding sell-the-news event in gold would lead to a pullback to the $1880 area, in my opinion. The price is now meandering at the upward-sloping consolidation box we have been showing and stochastic RSI is likely looking to fully stretch into oversold conditions. I was wrong about gold and silver stretching back to the top of their ranges on Friday intraday – although the prediction of a disinflationary PCE reading did materialize, price did not follow; could this be foreshadowing"sell the news" downward pressure ahead? Participants should brace for a bout of upcoming volatility, and the medium-term direction in a few asset classes should be clarified post-FOMC meeting.Follow J_GidaroDasilva jdasilva@kitco.com www.kitco.
Source: News Formal (newsformal.com)
For how long? Let's get over and done with this ongoing correction...
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