Technically, the trend remains bullish and the S&P 500 futures rally is still showing very little signs of fading. The morning pre-market pop sent US Equity futures back near the highs. There’s evidence that this 5 day consolidation is now resolving itself to the upside. But as equities remain elevated, Gold (NYSEARCA:GLD) is declining yet again (more on that below).
The S&P 500 futures rally (and broad move in equities) has now caused S&P 500 (INDEXSP:.INX) to trade OVER 2 Std Deviations above its 50-day MA for nearly 8 straight days. So it’s quite stretched after a nearly 10% rally from late June.
Investor sentiment has gone from bearish to bullish quickly. That said, we’ll need to see evidence of prices starting to turn down to have concern. For now, there remains little sign of that outside of just minor consolidation. Â Europe is showing bullish signals today as the STOXX 500Â held where it needed to and is now turning back up; this could result in a push above the early July highs. Germany is leading all European indices today, higher by 1.25%.
Around The Market
Gold is down 1 percent again while Crude oil is down fractionally. Â The US Dollar is showing small gains as well. Bond Yields are higher with 10 year trading back up above 1.56 – German bund yields are still negative.
Today’s early gains by Microsoft (MSFT) and Morgan Stanley (MS) are helping to set the tone and should help to power Financials and Tech a bit higher yet.
S&P 500 Futures Chart
We saw a good advance in pre-market that pushed the S&P 500 futures rally to new highs for the week. If it holds, it should allow for a push up to 2180-5 area.  On the flip side, giving this back by end of day and undercutting the prior lows would be decidedly negative.
GOLD Chart
Gold is continuing on the downside and appears headed for an area of key support near 1300. For Gold bugs, this area stands out given Demark analysis and trendlines as an area for traders to buy over the next 1-2 days. However, if the US Dollar continues to extend, than most metals should experience a bigger breakdown, so careful there. For now, after dropping from 1375, its likely we see at least some stabilization in Gold to the downside into end of week.
Thanks for reading and good luck out there. Note that you can also follow my work on Newton Advisor.
Twitter: Â @MarkNewtonCMT
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
