Last Tuesday I said "price action suggests a push trough (SPX) 2000 without retesting 1950." With that move calibrated we can now focus on whether price will break SPX 2110, and resume a broad market uptrend, or get crushed by sellers at 2040 - 2060 and pounded back into bear market territory.
Available technical evidence suggests a struggle (selling opportunities) at 2040 - 2060 for bulls, as bears wait to "prove" their assertions about weak earnings and low single digit GDP growth, but an eventual push through SPX 2110 into new market highs.
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| SPX Daily |
USD strength, for example, is failing as the DXY looks more poised to test 90 than maintain 96 - 95, assuming there are no abrupt exits from the Euro. In our inflation and debt-based consumer economy US dollar weakness, as demonstrated over the past forty years, boosts stock prices to the detriment of our purchasing power.
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| DXY Weekly |
Accompanying probable US dollar weakness is rising commodity prices. Does the oil chart below look like a picture of weakness to you? If so I'd like to know your reasoning.
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| Oil Monthly |
Adding to the bullish outlook is the VIX which, now below 20.00, looks ready to dive deeper into the mid teens.
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| VIX Daily |
Lastly, from the fundamental perspective, there is a perfect storm of uneventful, non-consequential US economic data for the remainder of the month following this Wednesday's predictable FOMC statement. Expect a rosy forecast form a "prepared" FOMC this Wednesday bolstered
by positive February Non-farm numbers and ascending risk asset
prices.
Happy marketing.
