pebblewriter

Tag: inflation

  • Update on Gold and Silver: Aug 20, 2024

    In our last dedicated Update on Gold and Silver in April, we noted that gold had reached our Fibonacci target of 2466.50 but could have further to go.

    GC is fairly straightforward. There’s a large IH&S pattern which completed around Mar 7 targeting 2557, a short distance above the white 1.618 at 2466.50.

    GC reached 2557 this morning.

    It’s interesting that it’s reaching overhead resistance at the same time as SPX and at the same time that DXY has reached our next downside target.

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  • Charts I’m Watching: Aug 12, 2024

    Futures are slightly higher in a week certain to be buffeted by a bevy of important economic data.

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  • Charts I’m Watching: Jul 30, 2024

    Futures are up slightly as the FOMC begins its July meeting. But, it’s a continuation of the consolidation that began last week.

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  • Update on RUT: Jul 23, 2024

    A lot has happened for RUT in the past week. It was only 11 days ago that we updated its chart, suggesting RUT would reach 2282 by the end of the year.

    RUT’s reversal at its .618 in April set up either a Gartley or Bat pattern, meaning a move to its .786 at 2282.27 or its .886 at 2364.78.  If we extend the dashed red trend line to the right, we get an intersection with the .786 at the end of the year – a very common scenario. While the .786 in December is a logical next target, an equally compelling case can be made for the .886 in September or October.

    Don’t look now, but RUT pushed past the red TL we discussed, allowing RUT to tag 2282 (well, 2278) late last week.

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  • On the Brink…Again

    Already elevated on AAPL’s announcement of a historic buyback, futures popped on a weaker than expected jobs report.

    The only problem is that this ramp puts them right back at the top of the channel which has prompted three previous tumbles. Will this one be any different?

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  • Stagflationary Data…Again

    Futures are off sharply on a very stagflationary offering of economic data. Q1 GDP rose at only 1.6% versus expectations of 2.4%, while core PCE prices rose 3.7% against expectations of 3.4%. The PCE index itself is due out tomorrow.

    Meanwhile, the Labor Department reported that unemployment claims for the week ended April 20 came in at 207,000 versus 215,000 expected and the 212,000-222,000 which have been reported in the past 6 weeks.

    Weaker than expected economic data, combined with stronger than expected inflation and employment, places the FOMC in a difficult position and a market which has been counting on lower interest rates downright bearish.

    Despite a strong showing in March, the SPX is right back where it was the last time we wrote about stagflation in February [see: Stagflation Fears Renewed.]

    About the only silver lining in our charts is the 10Y, which has reached our 4.738 target several weeks earlier than expected. The resistance at this level could make a difference for stocks.

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  • Charts I’m Watching: Apr 22, 2024

    Futures have regained about 30 points after last week’s drubbing.

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  • Tit for Tat

    Futures tanked overnight on news of Israel’s rocket attack on Iran, only to recover all their losses as we go to press. The latest retaliation is being characterized as a tit for tat.

    But it’s easy to imagine the Plunge Protection Team working overtime to calm markets by hammering VIX and WTI back down from their overnight highs.

    Meanwhile, SPX came within 1.89 of our 5,000 target yesterday, testing support that continues to be quite important.

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  • Update on Gold & Silver: Apr 17, 2024

    Gold and silver both came within 1% of our upside targets for them earlier this week. With inflationary pressures once again top of mind, have they exhausted their upside potential?  We’ll update our long-term forecasts this morning.

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  • Retail Sales’ Strong Beat

    Retail sales came in roughly double the Street’s estimates at 0.7% versus consensus of 0.3-0.4%. Ex-auto was just as strong: 1.1% versus 0.5% consensus. Combined with an Empire State Manufacturing index disappointment of -14.3 versus -6.0 expected, futures sold off for all of 30 seconds or so before rebounding to higher highs.

    The retail sales print, like much of the recent data, further reduces the odds of substantial rate cuts in 2024. Yet, as is often the case, the algos ignored the data and focused instead on several of their favorite factors: VIX, currencies and SPX’s bounce off its 50-day moving average.

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