Oil Smashing Stocks

S&P 500 didnt like newest weak information releases, but completed well off intraday lows. Yields continued to rise while HYG barely closed where it opened– thats not really risk-on. Cyclicals, and riskier parts of tech werent noticeably outshining– the S&P 500 rally felt like a defensive bounce off some oversold levels.

HYG didnt close highly either– rising yields are taking their toll, and will continue doing so.
Gold, Silver and Miners

For now however, increasing yields are putting pressure– and they would continue to increase. S&P 500 growth isnt to be trusted, and its protective nature out of tune with bonds, is part of the factor why.

Copper catch up was delayed a little– thats all. The decrease wasnt a true turnaround, and the red metal would take on $4.60 before too long again.
Bitcoin and Ethereum

Gold and silver downswing neednt be feared– while the metals are still sideways, the pressure to go up is developing, and the dollar concerns would be but the first driver (challenged faith in the Fed taming inflation would be next).
Petroleum

S&P 500 didnt like newest weak data releases, but finished well off intraday lows. Cyclicals, and riskier parts of tech werent noticeably outperforming– the S&P 500 rally felt like a protective bounce off some oversold levels.

Bitcoin and Ethereum still cant encourage on the advantage, and with no dovish surprise on the horizon, the course of least resistance probably stays down for now– todays session absolutely verifies that.
Summary
S&P 500 growth isnt to be trusted, and its protective nature out of tune with bonds, becomes part of the reason that. The stock exchange correction has further to go, and while tech overall would do well in 2022, it needs to decrease first– that would set the stage for a great 2H advance. The early stage of the Fed tightening cycle belongs to the bears, and it would continue to be commodities and valuable metals to weather the storms best. Long live the inflation trades.
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Upgraded on Jan 17, 2022, 11:53 am

The fund supervisor has actually been placed to take benefit of rising rates in his flagship hedge fund, the Odey European Fund, and has actually been attempting to warn his investors about the dangers of inflation through his annual Read MoreThats why it wont likely hold for long– I do not believe we have seen the end of selling– more drawback waits for. For now though, increasing yields are putting pressure– and they would continue to rise.
Commodities arent at all shaken, and Wednesdays positive copper relocation does not look to be an outlier– unlike Fridays decrease that didnt refer other base metals. Despite the fact that it might be relaxing to the pension funds, inflation rates arent likely to come down to the normal massaged 2% throughout the next 2-3 years, no matter whether the Fed hikes by 0.25% 6 or 8 times. The persistently and unpleasantly 4-5% high CPI is most likely to break the mainstream narrative, and remain with us for a lot longer than typically expected, which is just part of the reason that I am searching for gold to leave $1,870 s extremely convincingly in the dust this year.
Both yellow and black gold would increase in tandem, and the increasing open petroleum earnings (heavy long positions opened at $78) become part of the reason behind permanently elevated inflation ahead. The commodities increase is likewise no longer tempered by the rising dollar.
Lets move right into the charts (all thanks to www.stockcharts.com).
S&P 500 and Nasdaq Outlook

Crude oil still finds it easiest to keep increasing, and black gold could pause a little on the approach to $90– the fundamental and technical growth conditions are in place, and oil stocks will continue to be amongst the finest S&P 500 performers.
Copper

The tech reversal might bring the everyday weight of S&P 500 increase– the day-to-day weight just. Im not searching for this modest show of strength to hold.
Credit Markets

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