Catalysts This Week: S&P 500, Gold, Bonds, Dollar (Video)
We
want to review key securities' technicals and fundamentals along with
what we expect for this week.
Join us also for the video below
The below report is a sampling of what we offer Pro Trader subscribers every morning; concise, actionable calls based on fundamentals and technicals daily in SPY, gold, bonds, currencies and stocks. Any questions, please let us know. We're here to help.
S&P 500 Index: BULLISH
S&P 500 Index: BULLISH
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Charts
by Interactive Brokers
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We'd expect it to maintain this upward trajectory.
We still think May 22nd was a level that we may not break this year. It's a big call
but we're sticking to it.
Our short term signal on
the SPY just went bullish which is the first time in several weeks but it can
change any day.
Non-farm payrolls reported
a weak number a month ago and the market had trouble hitting new highs. Now
with a strong number reported Friday investors can have confidence again.
Add to that the coming
earnings season. Q1 saw the strongest earnings growth for S&P 500 Index companies in almost six years. We expect a strong Q2 as well.
You now have strong
jobs and strong earnings which in combination can
help the S&P 500 Index ETF SPY hold that uptrend.
"Pessimism about the
short-term direction of stock prices rebounded to a six-week high."
Good technicals, good
fundamentals and lots of skepticism should bode well for stocks.
Events This Week
Fed Chair Janet
Yellen speaks before Congress Wednesday
and Thursday.
CPI reports on Friday. It's
been very low. Low inflation is good for stocks and bonds and negative for
gold.
GOLD: BEARISH
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ETF GLD |
We are very bearish on
gold. If GLD (Gold ETF) breaks 114 it has very limited support below and can
head even lower.
Low inflation in
combination with Fed tightening are probably the main fundamental drivers of
this gold drop.
BONDS: CHANGE TO BULLISH
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ETF TLT |
We've had a change. After
this big drop we're getting bullish again.
This has been a big swift
drop. It's not the safest call but it does look like we are still in an
uptrend. We also drew a horizontal line with some arrows showing you what could
be a key support-resistance that bonds can hold at right here at these price levels.
Bonds can hold for a few
reasons.
*The Fed is tightening
which creates growth concerns, dropping rates. (Even though we don't believe
the growth concerns)
*The Fed did not yet taper.
Even tapering will keep the Fed buying in the open market only less so. Bonds
still have support.
*Baby boomers are not
letting go of their bonds so fast.
For these reasons, after a
nice drop along with technical support, we think there is a better chance bonds
can work their way back higher.
DOLLAR: NEUTRAL
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ETF UUP |
We have another opportunity
to buy the dollar for a bounce. We like politics in the US and are guessing
that bad-politics bottomed. Low inflation is good for the dollar. If we close
higher than 24.9, where we drew the horizontal line, we want to buy.
Let's Wrap It Up
Stocks may be getting people
bearish but they're still in an uptrend. We worry about gold but are looking to
get more constructive on bonds and the dollar.
Good luck
By: Chaim Siegel, Elazar Advisors, LLC
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Thanks! I do enjoy reading your articles on SA.
ReplyDeleteIm very happy to hear! thanks for the nice words!
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