Author: Philip Calrissian

It was another net bullish week in equity land, with the SPX having printed a new historic high of 6315. The bigger weekly and monthly charts are both offering the 6400s, and around 6500 by Labor day.

Gross complacency?

Yes, the mainstream sentiment is grossly complacent about multiple economic and geo-political threats. The housing market isn’t great, and many companies are firing people by the thousand. There is Ukraine/Russia, Israel/Gaza, and lets not forget China/Taiwan.

For now though, Mr Market doesn’t particularly care. Instead… the market is hoping for rate cuts (and arguably renewed printing), not least once Powell has been replaced.

My concern into the Fall… is the bond market. Despite President Trump stating he wants interest rates to 1% or lower, I’d be mindful that the bond market might have other ideas.

The US 10yr yield stands at 4.42%. Broadly… its been chop for around three years, and I’d be the first one to state… bullish >5.00%, and bearish <3.25%

With the ‘big beautiful bill’, or arguably ‘abomination’, having been passed, annual deficits will remain high, with the federal debt mountain likely to hit $50trn by 2030/32.

My inclination is to see a bullish breakout in the US 10yr >5.00%, and then onward to 7%. If you think that is ‘crazy talk’, well, I refer you to Dimon of JPM, who appears also to be leaning in that direction.

Monthly momentum in yields is highly prone to turning positive in Sept’ or Oct’. If that happens, its difficult not to see >5.00%, in which case all aspects of the capital markets are going to have to adjust.

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Two interesting things…

Crypto – XRP

XRP broke a new hist’ high of $3.66 on Friday. I’d note weekly momentum has turned positive for the first time since late February. A multi-month push to $10 looks an eventuality.

Commodities – Silver

This week saw silver print $39.14, the highest since Sept’2011. There is another 26% until a challenge of the 1980/2011 double top of the $49s.
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Yours… philip

The SPX saw a net May gain of +342pts (6.1%) to 5911. Momentum ticked a touch lower, and remains marginally negative. A monthly settlement back above the key 10MA (5811), as the s/t trend has to be seen as bullish.

Natural upside resistance is psy’ 6K, and then the February historic high of 6147. Having put in (April 7th) a hyper spike floor from 4835, the market has a reasonable chance of net upside into mid August. Beyond Labor day, the bears will have into mid/late October.

It should be clear though, the day to day action will be prone to further  jumps or spirals on tariff related headlines. If anything, we’ll need considerable popcorn across the summer, and into the fall.
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The SPX has climbed from an April 7th low of 4835 to 5528. That is some 693pts (14.3%) across just fourteen trading days.

On any basis… its been one dramatic April. Mr Market has managed to washout a great many of the m/t bulls, whilst then also washing out most of the s/t bears. Its been normal service… in some ways.

Now its merely a case of whether we stall from within the 5700/800s, and eventually break <4835, or we continue to recover upward, and break a new hist’ high (>6147) this summer

My guess… remains the former. That view would be dropped on any sustained price action >5850, which would be decisively back above the monthly 10MA and the daily 200MA.
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With Trump announcing tariffs, Thursday and Friday have seen the most bearish price action since March 2020. Some are using the C word… but that still isn’t merited. I’d accept some individual stocks are in semi-crash mode.

We’re clearly s/t oversold, and prone to a multi-week bounce, with a fair number seeking a back test of the 200dma (and effectively… the monthly 10MA) in the 5700s within May/June.

As I noted at the end of March, I see the main market as ‘Mid term broken’, and I lean net bearish into the ‘seasonal flooring time’ of October.

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Even the once beloved Nvidia is m/t broken, having already fallen from the $152s to $92s.

Natural target is psy’ $50, although that looks out of range until Sept/Oct’.

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