More S&P 500 Downside, Tuesday


PPI above expectations made stocks move higher, only to give back the majority of premarket gains. Weakness was disappointing, as was the stagnant chopping of stocks through much of the day ending on a lightly higher note that could bring future consequences, as evidenced in the charts.

The risk-off environment grows more extreme (10y Treasury rate going back up from 4% to 4.16%), causing stress on growth stocks. With Retail Sales and Empire State manufacturing unlikely to please on Tuesday, and the Fed’s read of Wednesday having the potential to restrain the market outlook, no bull-ishly surprising catalyst arrives next week.

Rotations to – Financials, Industrials, Materials, Energy- have been muted, so there’s no saving Grace for the stock market.Monday should bring continued market pressure due to yields getting ready to spike, and gold reaching towards Dec support of $1930-$1,935, bottoming around $22.50 in silver.

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Getting into the analysis (all courtesy of ) 4,492- 4,495 are ‘points of control’, a move beyond likely enabling 4,515. 4,460 via 4,482 looks more realistic for Tuesday amid news next week. Biased remains short and the risk sentiment extends past Monday. Good buys for commodities related investing, such as gold close to its bottom point and silver near support level $ 22.70.

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Robert Wilson author
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