S&P 500, Fed Fund Futures, AUDUSD and GBPUSD Talking Points:
- Though the prevailing trend in risk-leaning assets is bullish going back the past year and decade, that doesn’t make a return to pace easy for the likes of the S&P 500
- Taper fears remain as markets dispute central bank forecasts, Reddit interests seemed to hit the news with RKT and officials from the two largest economies posted bubble warnings
- While I am most concerned about risk trends, scheduled discreet event risk is heaviest for the UK with the budget update, AUD on GDP and USD with the ISM services
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So Much for a Full Restoration of Risk Trends…But Reddit Interests are Flaring Up
We started this week (and month) with a broad bid in risk-leaning assets that roused many bulls’ hopes that the markets would return to the prevailing bull trend of the past year. Unfortunately for those looking for conviction, we would see the effort fall apart before we could even overtake interim resistance. That is not an overhead like a record high on the major US indices. Rather, it was simply clearing the upper bound on congestion from the past few weeks of congestion. For the S&P 500, the ceiling is a thin but prominent trendline resistance roughly around 3,910. I will be watching this benchmark in particular for guidelines for conviction going forward with a break of either 3,910 or 3,800 a first step to picking a direction for this predisposed bullish icon. Yet, for taking the true temperature of the market, the broad performance of the various assets with a sentiment connection will stand as a better gauge for confidence.
Change in | Longs | Shorts | OI |
Daily | 16% | -9% | 2% |
Weekly | 20% | -3% | 7% |
Chart of S&P 500 with 50-Day Mov Avg (Daily)
Chart Created on Tradingview Platform
Heading into Wednesday trade, I find many of the unrelated risk benchmarks that are on my regular watchlist – global indices, emerging market measures, junk bond ETFs and speculative commodities are comfortably within the range established over the past three to…
Read More: S&P 500 Checks Lower as Reddit Traders Return, GBPUSD and AUDUSD Top Watch