Mark

All eight BEGOS Markets begin their week in the red, those at present below the day’s Neutral Zone being the Swiss Franc and the three metals; volatility is pushing toward moderate. The Gold Update recognizes price’s fourth consecutive up week, albeit currently within the 1779-1854 resistance zone such that the upglide on below-average volume appears rather sedate. Therein as well we cite the various overvalutions of the S&P at present, including its very expensive P/E ratio and the Spoo’s extreme deviation from its Market Value, in real-time 365 points “high”. By the same measure, Gold is 51 points “high” and Oil 10 is points “low”. The Econ Baro receives August’s NY Empire State Index and the NAHB Housing Index.

As it seems we’ve oft seen of late, all eight BEGOS Markets are by this hour inside of their respective Neutral Zones; volatility is light. With respect to our S&P 500 MoneyFlow page, for the past five days, despite the Index’s having been on the rise, the Flow has not been supportive of the up move. And by the high P/E (the “live” reading at present 37.8x), Q2 Earnings Season has been coming in as one of the weakest by comparative improvement across the past several years. For the Bond, the noted drop of late in the “Baby Blues” (see Market Trends) saw price accelerate lower yesterday. The July reading of the PPI (headline number) was shinkage of -0.5%; we’ll see if this leads to a deflative for the CPI in a month’s time, although the “feel”/fact of inflation is all ’round. The Econ Baro concludes its week with Aug’s UofM Sentiment Survey, plus July’s Ex/Im Prices.

Yesterday’s stunningly zero inflation CPI headline number for July drove the Spoo up 60 points (from 4139 to 4199) in a mere four minutes. At present, ’tis at 4231, above its Neutral Zone for today, as is Copper. None of the other BEGOS Markets are below same, and volatility is again mostly light per this hour. The Spoo’s rocket-shot saved the “Baby Blues” from their dipping, and with the S&P itself now 17 days “textbook overbought”, the “live” P/E (futures-adjusted up to this moment) is 39.3x, a reminder of this Q2 Earnings Season weakness. By Market Values, the Spoo (in real-time) is 359 points above its smooth valuation line; other extended readings therein find Gold some 50 points high and Oil some 10 points low. July’s PPI comes due for the Econ Baro.

Again, at present we’ve all eight BEGOS Markets inside of their Neutral Zones; volatility is mostly light. At Market Trends, the Spoo’s “Baby Blues” in real-time are kinking lower, an early sign that a change of trend may be nigh: whilst the trend remains positive, its consistency is weakening. For the S&P itself, yesterday marked its16th consecutive trading day of being “textbook overbought”. Similarly for the Bond, Euro and Swiss Franc, their respective “Baby Blues” too continue to show similar weakening of the uptrends. Spoo 4122 by the Market Profile is the most dominantly-traded handle of the past 10 trading days, it becoming the line in the sand between support and resistance. The Econ Baro looks to July’s CPI and Treasury Budget, plus June’s Wholesale Inventories.

A brief acknowledgement of missing the boat: last Friday (05 August) we anticipated slowing for July’s Payrolls, which instead grew, (interesting details in the current edition of The Gold Update). For today, at present all eight BEGOS Markets are inside of their Neutral Zones, and volatility is very light, Copper’s EDTR (see Market Ranges) with a 35% tracing and the only one of the bunch exceeding 30% thus far. At Market Trends, the Bond’s “Baby Blues” have further weakened whilst those for the Euro and Swiss Franc continue to appear topping out. In real-time, the Spoo’s gap above its smooth valuation line remains extreme at 319 points, the S&P itself now 15 days “textbook overbought”; the S&P’s “live” P/E is 37.1x. For the Econ Baro we’ve Q2’s Productivity and Unit Labor Costs.

The Spoo is off to a firm start for the week as are Oil and Copper, those BEGOS Markets all trading at present above today’s NZ; none are below same, and volatility is light. The Spoo is (in real-time) 342 points above is smooth valuation line (see Market Values) and the S&P is now 14 trading sessions “textbook overbought”. At Market Trends, only Oil remains in a negative linear regression downtrend; however, the upside consistency has begun to crack in the trends for both the Bond and Swiss Franc. The Gold Update points to its weekly parabolic trend having finally flipped to Long following an 18-week Short stint; Gold’s near-term challenge is to break above its 1779-1854 resistance zone. The Econ Baro’s recent spike is its best 8-day up-move since 2004.

For a third straight day by this hour, Copper is the only BEGOS Market trading outside (in this case above) its neutral zone. Volatility is light (save for Copper’s 66% EDTR tracing [see Market Ranges] thus far). The Spoo (in real-time) remains excessively high by its smooth valuation line (see Market Values), price at present 352 points “high”; the “live” P/E of the S&P 500 is 37.2x, the “P” rising faster than the “E” as Q2 Earnings Season continues to unfold: with 406 of the S&P’s constituents having reported, only 62% have bettered their COVID-effected earnings of Q2 a year ago, the declining Economic Barometer having been a leading indicator of this relatively weak Earnings Season. Indeed, the Econ Baro wraps up its week with slower Payrolls growth for July and an expected decline in June’s Consumer Credit.

In a mirror from this point of the session yesterday, Copper is the sole BEGOS Market trading at present outside (this time below) its Neutral Zone; volatility is mostly light. The Spoo remains overextended at a near century-to-date extreme vis-à-vis its smooth valuation line (see Market Values), the S&P itself now “textbook overbought” through 12 consecutive days. The “live” P/E of the S&P has further increased to 37.3x as prices rise without Earnings participating at a like rate. Our sense is the “herd” believes the bottom is in; the fundamentals hardly support such, even as the Econ Baro is getting a bit of a bump ahead of slower payrolls growth due for July come Friday. For today, the Baro looks to June’s Trade Deficit.

Copper is the sole BEGOS Market trading at present outside (above) its Neutral Zone; volatility is again mostly moderate. Given the weakness of Q2 Earnings Season and the S&P 500 having achived the suggested 4100 level, we’re anticipating the Index to crack, especially as the Spoo is (in real-time) 314 points above its smooth valuation line (see Market Values); in looking back century-to-date, the only stint of like points deviation was during the post-COVID bounce in April 2020, following which there were bi-directional moves of 100+ points over the ensuing few weeks. To the current end, we’re minding the Spoo’s “Baby Blues” (see Market Trends), which thus far today are again notched a bit higher. The futs-adj’d “live” P/E of the S&P is 35.1x. Due for the Econ Baro are July’s ISM(Svc) Index and June’s Factory Orders.

The Spoo has crept back below today’s Neutral Zone; above same is the Bond, and volatility is mostly moderate. The S&P 4100 area is displaying the anticipated resistance in concert with Q2 Earnings Season remaining comparatively weak: the “live” P/E of the S&P in a single day yesterday (wherein the Index itself was down a quiet -0.3%) leapt from 33.4x to 35.3x; better than half-way through the Season, 38% of S&P constituents reporting have not improved their bottom lines of a year ago: and back then, interest rates were essentially zero versus 2%-to-3% money today. Our live reading of the Spoo finds it 323 points above its smooth valuation line (see Market Values), whilst the Spoo settled yesterday 122 points above its Market Magnet.

01 Aug ’22, 09:14 Central Euro Time: Save for the Euro and Swiss Franc, the BEGOS Markets commence the week to the downside, notably at present with both Silver and Copper trading below today’s respective Neutral Zones (“NZ”). The S&P 500’s recent relief rally has extended the Index by “textbook technicals” to being “extremely overbought”, the Spoo itself (in real-time) now 356 points above its smooth valuation line (see Market Values), its highest deviation in better than two years. As noted in The Gold Update, the S&P has yet to test its 3600-3200 support zone, which we anticipate to occur in due course given the advantageous yield in the Bond market and the historically high “live” P/E of the S&P now reading 33.7x. The Gold Update further affirms by our Economic Barometer the StateSide economy being clearly weaker than suggested by the mildly negative Q2 GDP. The Econ Baro today looks to July’s ISM(Mfg) Index and June’s Construction Spending.

29 Jul ’22, 09:15 Central Euro Time: As anticipated these recent months, “The Recession” is now formally recognized, (and absent the Chain Deflator ’tis rather severe as ’twill be noted in tomorrow’s edition of The Gold Update). Today, the Euro, Swiss Franc, Gold and Silver all are trading at present above their respective NZs; none of the other BEGOS Markets are below same, and volatility is moderate. Per our 18 Jul comment, the S&P 500 is near to its 4100 structural resistance area (yesterday’s high being 4079). ‘Tis a busy conclusion to the week for the Econ Baro, incoming metrics including Jul’s Chi PMI, Jun’s Personal Income/Spending and Fed-watched Core PCE Inflation Index, plus Q2’s Employment Cost Index.