I will update with this week tech report more fully as of Friday but for now a brief summary of where we are as i see it.
First up – The lead US equity risk mkts – The Sp500 target of 2718 has clearly come into play as this corrective bounce plays out. Momentum is fading suggesting a near term corrective pull back is now close. This has been a very strong rally, indeed breaking many records just as the bear market A wave falls also broke records. In spite of this nothing has changed at a structural level. The high conviction call is for later February falls in risk. 2675 sp500 cash is the new near term trading support to watch. The sp500 is on her way back to her 200 day broken average. Cyclical sectors like DJT and SOX are clearly over bought whereas defensives in a wave c of a corrective move.
US$ is bouncing from her key supports with inverse to gold likely even as risk starts to distribute. Targets near term 1340 to 1360 still possible mid Feb before more US$ strength corrects the asset class end Feb into March before starting her next significant bull wave in the coming months starts again. (Buying into end Feb early March weakness the conviction trade setup, levels to come).
Euro risk – watch Italian bank. Structurally nothing has changed. Technically new lows beckon. The conviction trade is for all Europe and particularly the outperforming cyclical sectors will start a new wave of weakness from the contagion.
Much more Friday. Luck to all.
Rich