Small break

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The S&P 500 could get a bit ahead of itself in the very near term – the price decline looks like it needs a very brief consolidation. Bonds also paused, and the drop in Treasury yields I told you about would happen first, unfolds. The 10yr closed below 3%, and with the aim of moving slowly but surely from inflation to deterioration in the real economy and labor market, I expect yields to fall further. (before rising in the longer term). The Fed hasn’t pivoted yet – and it won’t for the next two sessions. – but the upward pressure on rates from many is slowly receding Precious metals (and copper) don’t like the pullback in inflation data (PCE deflator) and inflation expectations – coupled with the outlook for the real economy, these will suffer, with gold being relatively, relatively more resilient (which wouldn’t protect it from decline of course). Unlike Crude Oil where I remain bullish with respect to the two possible corrective scenarios outlined earlier (the fight for $108.50 discussed yesterday is ongoing).

Yesterday I received an interesting question about the real value that retail traders provide to the markets. If you’re also wondering, take a look at my point in the first and second part of the answer – it will resonate.

As part of the November 12, 2021 legal update on my homepage, the key primary hearing is scheduled to continue shortly. Demanding event involving long travel – I will only post brief updates for the nearest 5 trading days. I will not be able to provide analysis, updates, or much activity on Twitter between July 11-15. Looking forward to my return to serve you on July 18!

Let’s go straight to the graphics.

S&P 500 and Nasdaq Outlook

The legend says it all – the S&P 500 is halting somewhat and looking for the next near term direction – the lower node I wrote above yesterday has materialized. The consolidation of the steep downward turn I took for you is in order.

Credit markets

Chart

Bonds are taking a break from the strong risk aversion stance, and that should coincide with the reprieve in equities.

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