Mark

All eight BEGOS Markets begin the final trading day of the year at present within today’s Neutral Zones; volatility is mostly light. Yesterday’s +1.7% rally in the S&P 500 was not sufficient to unwind the “textbook oversold” trading status, now nine days in duration; regardless, the “live” P/E (futs-adj’d) of the S&P is 37.0x, and by the MoneyFlow page the quarterly reading suggests the S&P be -525 points lower that its present level of 3849. Meanwhile at Market Values, we’ve the Bond as some -2 points “low” from its smooth valuation line, the Euro as +0.028 points “high”, Gold as +51 points “high”, Oil in sync with valuation, and the Spoo as -132 points “low”. And by Market Trends, they are positive for the Euro, Swiss Franc, Gold, Silver, Oil (barely), and negative for the Bond, Copper (barely) and the Spoo. The Econ Baro completes its year with December’s Chi PMI. Happy New Year!

The Bond and Swiss Franc are at present above today’s Neutral Zones; Oil is below same, and volatility is again light. At Market Trends, the Spoo’s “Baby Blues” continue to work lower as the linear regression downtrend becomes more consistent, albeit the S&P 500 itself has recorded its eighth consecutive day as “textbook oversold”; the Spoo (3813) has broken below the aforementioned key support/resistance zone now fairly defined as the 3850s. Oil’s uptrend has lost but all of its consistency, its rising “Baby Blues” now stalling on their 0% axis. By the same construct, both the Euro and Swiss Franc are the firmest of the bunch. The Dollar Index has essentially come off as much as -10% since its September high.

Both Gold and Oil are trading below today’s Neutral Zones; the other BEGOS Markets are at present within same, and volatility is light. At the MoneyFlow page, the differential on the quarterly measure is now -664 points, a leading impetus toward lower S&P levels; still, the S&P 500 just recorded its seventh consecutive session as “textbook oversold”. Specific to the Spoo (3868), the tight 3863-3855 range is building (by Market Profiles) as a key support/resistance band; more broadly (by Market Rhythms) the Spoo’s daily MoneyFlow (data provider version) tops the list of the 405 rhythms run per night; the study’s hindsight swing profit across the past 10 triggers since mid-March is $80k/cac. The Econ Baro awaits November’s Pending Home Sales.

The BEGOS Markets begin the week on a positive note, the Euro, Gold, Silver Copper and the Spoo at present above their respective Neutral Zones for today; none are below same, and volatility is light-to-moderate. The Bond by Market Trends appears within a day or so of seeing its linear regression trend rotate from positive to negative to join both the Spoo and Oil as such, (however that for the latter is rotating toward a return to positive with the balance of the bunch). As fundamentally overvalued is the S&P, it nonetheless shows as “textbook oversold” these last six sessions, and the Spoo by Market Values is (in real-time) -84 points below its smooth valuation line. Again, the MoneyFlow diversion noted in yesterday’s comment is of greater import toward ultimately lower S&P levels.

Briefly as the BEGOS Markets are closed until they commence their new week tonight at 23:00 GMT, we point to our MoneyFlow page for the S&P 500 wherein by the quarterly measure the Flow is -605 points below the Index itself. As this is a leading indicator, we sense it does not bode well for the S&P as it transits into 2023, (nor does the “live” P/E of 36.4x given the historic mean of 22.4x). As penned in the current edition of The Gold Update: “…the S&P 500 (3845) is +62% above its earnings valuation and … Gold (1806) is -53% below its U.S. Dollar debasement valuation…” ‘Twould appear the era of easy money is ending.

The members of the BEGOS Markets’ metals triumvirate are all at present above today’s Neutral Zones; none of the other components are below same, and volatility is still for this time of the session mostly light. Yesterday in pointing to the Spoo’s swiftly falling “Baby Blues” (see Market trends), the high-to-low range was -131 points; our “live” P/E of the S&P is now 35.7x. As well in the overvalued sensed, the S&P itself (3822) by our quarterly MoneyFlow reading is 549 points too high; however by Market Values, the Spoo (in real-time) having come off a bit now shows as 130 points too low, (of course, the MoneyFlow is a broader, bearish measure). The Econ Baro finishes its busy week with metrics including November’s Durable Orders, New Home Sales, Personal Income/Spending and the Fed’s favoured gauge of inflation: Core PCE Prices. Merry Christmas to Everyone Everywhere!

Both the Bond and Euro are at present above their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility again is mostly light. The Spoo’s “Baby Blues” (see Market Trends) are swiftly falling, the negative linear regression trend becoming more consistently so; consistency is notably unraveling for the positive trends of both the Bond and Copper. As a near-term trading rhythm for the Spoo, the 2-hour parabolic study purely on a swing basis has been repetitively fruitful this December. November’s Leading (i.e. lagging) Indicators come due for the Econ Baro, which also awaits the final read for Q3 GDP.

Both Gold and Silver are at present below their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility is mostly light. By Market Values, the Bond’s “Baby Blues” confirmed dropping below their key +80% axis, suggestive of still lower levels near-term; at a glance however, the Bond looks more as a sell into strength below 132 rather than an outright sell here at 128, (subject as ever to one’s cash management parameters); by Market Values (in real-time) the Bond shows as 2.5 points “high” above its smooth valuation line; but by its “faster” Market Magnet, the Bond settled yesterday some 2.5 points “low”. For the Econ Baro we’ve December’s Consumer Confidence, November’s Existing Home Sales, and Q3’s Current Account Deficit.

Whilst not an officially BEGOS Market, the Yen is on the move, +3.4% as the Bank of Japan doubles the width of its 10-year Bond’s trading band, the Dollar Index in turn at present -0.6%. Gold and Silver both are above their respective Neutral Zones for today; below same are the Bond, Oil and Spoo; volatility is moderate-to-robust. By our Market Values page (in real-time): the Bond shows as +3.2 points “high” above its smooth valuation line, the Euro as +0.04 points “high”, Gold as +65 points “high”, Oil as -8.90 points “low”, and the Spoo as -133 points “low”. The Econ Baro receives November’s Housing Starts and Building Permits.

The busy StateSide Econ Data week begins with the Euro, Swiss Franc, Gold, Silver, Copper and Spoo all at present above their respective Neutral Zones for today; only the Bond is below same (Oil is quiet), and volatility is light-to-moderate. The Gold Update again lays out a case for 1900 (current price 1806) as the fundamentalists face off against the technicians guarding the overhead resistance of the 1800s in general. The Spoo (even though up early on) has confirmed its linear regression trend having rotated to negative (see Market Trends); the S&P’s “live” (futs-adj’d) is 36.1x. And the Econ Baro awaits December’s NAHB Housing Index.

The Econ Baro recorded a fairly negative day yesterday on a bevy of weakening metrics (as we’ll outline in tomorrow’s edition of The Gold Update). In turn this jolted most of the BEGOS Markets in the face of rates (per the Fed) to extend to an even higher levels than initially sought when this increase cycle commenced. For today, we’ve the Bond, Silver, Oil and the Spoo all at present below their respective Neutral Zones for today; none are above same, and volatility is light-to-moderate. As anticipated by Market Trends, the Spoo’s linear regression has (in real-time) rotated to negative as its “Baby Blues” drop below their 0% axis; Oil remains the only other component whose like trend is negative. The S&P looks to begin Friday with its “live” P/E at 36.7x and yield 1.716% vs. that for the 3-month T-bill at 4.213%.

Down is the watchword into a busy Econ Data Thursday: save for the Bond and Oil which are just marginally down, the balance of the other six BEGOS Markets are all trading below today’s Neutral Zones; volatility is already moderate-to-robust; Gold which is -1.7% and Silver which is -3.5% have thus far respectively traced 152% and 137% of today’s EDTRs (see Market Ranges). At Market Trends, the Spoo is still clinging to its marginally positive linear regression uptrend; and by Market Values (in real-time) the Spoo (even -0.9% at present) is 62 points above is smooth valuation line, albeit that gap appears destined to close. For the Econ Baro which concludes its week today, metrics include December’s NY State Empire and Philly Fed Indices, November’s Retail Sales, IndProd/CapUtil, and October’s Business Inventories.

Ahead of the FOMC’s final Policy Statement and Powell Presser for 2022 — and following yesterday’s rampant volatility — all eight BEGOS Markets are at present priced within their respective Neutral Zones for today; volatility is again light (but doubtless shan’t so stay come the Fed at 19:00 GMT). Yesterday’s Spoo closed -126 points (at 4054) off the intraday high (of 4180); the MoneyFlow for the S&P was weaker than the Index’s net gain when the dust finally settled +29 points. Still by Market Trends, the Spoo’s linear regression is positive, albeit its consistency has waned considerably these past two weeks. With the Fed in the balance, the Econ Baro looks to November’s Ex/Im Prices.

Both Gold and Copper are at present trading above their respective Neutral Zones for today; the other BEGOS Markets are within same, and volatility is light. Yesterday’s S&P gain was sufficient to maintain a positive linear regression trend for the Spoo by Market Trends; thus Oil continues to be the only component whose such trend is negative. Stocks’ rally pushed the “live” P/E of the S&P now up to 38.4x (futs adj’d). Market Profile support for the Spoo (basis March) is 3994-3992. The Econ Baro awaits November’s CPI. (Note: tomorrow’s post will be delayed from this usual posting time, but we look to get it in ahead of the Fed).

he Spoo by Market Trends

The Bond begins the BEGOS Markets’ week as the sole component trading at present above its Neutral Zone for today; below same is Gold, and volatility is mostly light. The Gold Update points to price whilst still in a near-term rise as losing upside consistency: mind the “Baby Blues” at Market Trends; Gold’s weekly parabolic Long trend remains intact although the year-over-year linear regression trend continues to rotate to negative as it has been doing since mid-June. In real-time for the Spoo, the 21-day linear regression trend has rotated from positive to flat, (albeit 32 points of fresh premium in the March contract can right the ship there); still by earnings, MoneyFlow and Market Values, the S&P/Spoo remains significantly expensive, certainly so with far more attractive U.S. Treasury debt yields. The Econ Baro starts its week with November’s Treasury Budget.

The Swiss Franc, Copper and the Spoo are trading at present above today’s Neutral Zones; the balance of the BEGOS Markets are within same, and volatility again is light as our Market Ranges continue to narrow. The Spoo’s cac volume is rolling from December into March, the latter’s premium being +31 points (one of the highest we recall) with short-term money trading at a comparably high yield. The price deviations from valuation that we noted in yesterday’s comment continue to remain excessive and well-worth watching (via Market Values) toward year-end and as 2023 gets underway: price always resolves to valuation, (albeit valuation itself also shifts at a ponderous rate from day-to-day). The Econ Baro completes its week with December’s UofM Sentiment Survey, November’s PPI, and October’s Wholesale Inventories.

All eight BEGOS Markets are at present within their respective Neutral Zones for today, and volatility is light. By our Market Values page for the five primary components (in real-time): the Bond is nearly +8 points “high” above its smooth valuation line, the Euro +0.03 points “high”, Gold nearly +77 points “high”, Oil nearly -16 points “low”, and the Spoo some +26 points “high”. At Market Trends, Oil continues to be the sole component with a negative linear regression; however for trend consistency, the “Baby Blues” are falling for the Euro, Swiss Franc, Gold and the Spoo. Specific to the S&P 500 the “live” (futs-adj’d) P/E is 37.2x and the yield 1.671% (vs. the three-year U.S. T-Bill at 4.183%). Save for Initial Jobless Claims, ’tis a quiet day for the Econ Baro.

Copper is the sole BEGOS Market at present trading outside (below) its Neutral Zone for today; session volatility is mostly light. Oil’s (74.25) two Long signals have exceptionally failed, the “Baby Blues” at Market Trends running out of puff as price retests recent lows, and the daily Parabolics having confirmed flipping back to Short; (as we’ve reminded over these many years, cash management is paramount to being correct about market direction, and this Oil event is a perfect example to move on to other opportunities). Too, Market Ranges (save for Oil and Silver) have been narrowing of late which impinges price following through from otherwise reliable Market Rhythms and studies. For the Econ Baro today we’ve October’s Consumer Credit plus the revision to Q3’s Productivity and Unit Labor Costs.

As ‘round this time yesterday, all eight BEGOS Markets again are at present within today’s Neutral Zones; volatility is light.  Oil made a lurch higher yesterday however has since fallen back to now to 77.71:  still by Market Trends, Oil’s “Baby Blues” continue a fresh climb (meaning the downtrend is becoming less consistent)  and the daily Parabolics continue their relatively new Long course; by Market Values (in real-time) Oil shows as a full 11 points below its smooth valuation line.  For the S&P 500, by the MoneyFlow page, the Flow has improved vis-à-vis the Index on both the daily and monthly measures; but on the quarterly graphic, the Flow is 431 points below the Index.  October’s Trade Deficit comes due for the Econ Baro.

All eight BEGOS Markets at present are within their respective Neutral Zones in beginning the week; volatility is light-to-moderate. Oil’s “Baby Blues” (see Market Trends) confirmed curling up above their -80% axis, indicative of higher price levels near term: currently 80.08, a run into the 84s appears reasonable; too, Oil’s daily Parabolics flipped to Long on Friday; (and obviously, OPEC and Russia are affecting the fundamental front). The Gold Update maintains its bullish bent, albeit acknowledging the overhead resistance here in the 1800s. The “live” P/E of the S&P (as fut’s adj’d) looks to start the trading week at 38.8x, which ought be unsustainable on the back of the inverted yield curve. The Econ Baro awaits November’s ISM(Svcs) Index and October’s Factory Orders.

Early on as the Econ Baro awaits StateSide Payrolls data for November, we’ve not surprisingly all eight BEGOS Markets at present within their respective Neutral Zones for today; volatility thus is light.  There is the sense for the S&P 500 that a complacency to accept the risk of the extremely overvalued Index has returned, albeit we doubt it lasts as long as it has during other such periods, (i.e. when the “live” P/E resides in the upper 30s as it is today), especially with safer and more attractive U.S. debt yield available. Gold (with the help of +15 points of February contact premium) yesterday regained 1800 for the first time since 15 August; too, the Dollar Index is down to its lowest level (104.555) since early August. We’ll include the BEGOS Markets’ year-to-date standings in tomorrow’s edition of The Gold Update.

Following yesterday’s FedSpeak-driven rallies, the BEGOS Markets begin December with moderate volatility early on; the Swiss Franc and Gold are at present above today’s Neutral Zones whilst Copper is below same. The “live” P/E of the S&P is (a futs-adj’d) 39.3x , an unconscionably high level given the positive interest rate environment: the return from the three-month U.S. T-Bill (4.253%) clearly is better than twice that of the S&P (1.617%) … and without the downside risk. The Spoo by Market Values is (in real-time) now 211 points above its smooth valuation line. The Econ Baro’s metrics parade continues and includes November’s ISM(Mfg) Index, plus October’s Construction Spending, Personal Income/Spending, and the Fed’s favoured gauge of inflation: Core PCE Prices.

Gold is the only BEGOS Market at present trading outside (above) its Neutral Zone for today; session volatility is notably light. By the S&P MoneyFlow page, the Index per the quarterly measure shows as 511 points above the flow, indicative of materially lower price levels; too by Market Values, the Spoo (in real-time) reads as 112 points “high” above its smooth valuation line; thus far today, the Spoo has traded fairly in between its two most dominant Market Profile apices: 3958-3970; the “live” P/E of the S&P is 36.9x. ‘Tis a busy day for the Econ Baro with November’s ADP Employment data and the Chicago PMI, October’s Pending Home Sales, and the second look at Q3 GDP. Late in the session comes various FedSpeak and the Fed’s Tan Tome.

‘Tis an up session thus far across all eight BEGOS Markets, with Gold, Silver, Copper, Oil and the Spoo all at present above their respective Neutral Zones for today; volatility is already firmly moderate. Looking at Markets Rhythms, the most consistent on a swing basis (10-test module) are the Swiss Franc’s 30-minute Price Oscillator and (24-test module) Gold’s daily Parabolics. At Market Trends, the “Baby Blues” for both the Euro and Swiss Franc are just beginning to exhibit running out of upside puff; thereto by Market Values, the Euro (in real-time) reads as 0.0268 points “high” above its smooth valuation line. The Econ Baro begins its parade of 16 incoming metrics over these next four days with November’s Consumer Confidence.

The week begins with the Bond at present above its Neutral Zone; below same are Silver, Copper, Oil and the Spoo; BEGOS Markets’ volatility is light-to-moderate.  The Gold Update cites price resiliency even as the most recent Econ Baro metrics have indicated some improvement and interest rates are couched to keep rising regardless of pace.  Oil (74.22) has not traded this low since last December; it remains the only component by Market Trends in negative linear regression.  Copper’s cac volume is rolling from December into March; soon to follow shall be that for Silver and the Bond, with Gold to roll into February.

The two-day session continues with both the Swiss Franc and Silver at present below their Neutral Zones; the balance of the BEGOS Markets are within same, and volatility is moderate at this point for the combined session. Going ‘round the horn (in real-time) for the primary components’ Market Values:  the Bond is nearly 4 points “high”, the Euro more than 0.03 points “high”, Gold 54 points “high”, Oil 9 points “low”, and the Spoo 204 points “high”.  The yield on the three-month U. S. Treasury Bill is 4.200%; that on the S&P 500 is 1.674%.  By Market Rhythms, on a 10-test basis, the most consistent study is Copper’s 15-minute MACD, whilst on a 24-test basis ‘tis the Bond’s two-hour Parabolics.

StateSide ’tis Thanksgiving: thus we’ve a two-day “Friday” session underway for the BEGOS Markets with a five-hour trading halt today (Thursday) at 18:00 GMT and an abbreviated trading session on Friday itself with all components closed by 18:45 GMT. Not surprisingly, all the products are at present within their respective Neutral Zones. By Market Trends, upside consistency is improving per the “Baby Blues” for the Bond, Euro, Swiss Franc and Spoo; for the metals triumvirate, the uptrend consistency continues to weaken; and for Oil itself, the trend itself remains down. The S&P’s brief session tomorrow will commence with the P/E at an extreme 37.7x (as presently marked to the Spoo in real-time), the Index itself “textbook overbought” through the past 10 trading days (two weeks).

The Euro is the sole BEGOS Market trading at present outside (above) its Neutral Zone for today; volatility is again mostly light on this StateSide “get away” Wednesday. At Market Trends, Oil’s “Baby Blues” continue to accelerate lower, even as price (81.54) is well off Monday’s low (75.08); too, we’re noting the Blues’ negative rollovers for the metals triumvirate, indicative of their linear regression uptrends running out of puff, Gold, Silver and Copper all well off their highs of the prior week. At Market Values, real-time reads show Gold as 45 points “high” and Oil as 7 points “low”. The Econ Baro’s only incoming metrics day for this week is today, including those for October’s Durable Orders and New Home Sales. Late in the session is the release of the FOMC’s Minutes from the 01-02 November meeting.

Gold, Silver and Oil are at present above their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility is mostly light. Following Silver’s daily Parabolics having flipped to Long effective Friday, the white metal’s “Baby Blues” yesterday confirmed dropping below their key +80% axis (see Market Trends) suggestive of still lower prices near-term, a run to 20.00 not being untoward, (even as price is higher today at 21.15). Oil’s recent selloff has rotated its linear regression trend from positive to negative. By the MoneyFlow page, the S&P from the monthly measure to the quarterly measure portends the Index as some 300-500 points too high, (as does clearly the “live” P/E at 36.4x); by Market Values, the real-time read shows the Spoo as 144 points “high”. Again, the Econ Baro today awaits tomorrow’s sole day of incoming metrics for this abbreviated trading week.

The BEGOS Markets begin a somewhat abbreviated trading week (StateSide Thanksgiving) with all but the Bond to the downside; volatility is light-to-moderate. The Gold Update acknowledges both the parabolic weekly trend and linear regression trends as Long, however with some near-term weakness more immediately. Q3 Earnings Season has concluded: for 455 S&P 500 constituents having reported, only 58% reported better year-over-year bottom lines, at least the fifth-weakest comparable performance over the past 22 quarters. For the Econ Baro, all this week’s few metrics (four) come due Wednesday with respect to the StateSide holiday.

Silver is the sole BEGOS Market trading at present above its Neutral Zone for today; ’tis a bit ironic as Silver’s daily Parabolics flipped to Short effective today’s open: in last night’s data run, that Market Rhythm (of the 405 tested) is the most consistent by follow-through; moreover by Market Trends, Silver along with the other components (as noted in yesterday’s comment) appears toppy. Either way, overall markets’ volatility to this point of the day is light. At Market Values, real-time readings find the Euro as 3.76 points “high” above its smooth valuation line, Gold as 77 points “high”, Oil as -6.29 points “low”, and the Spoo as 165 points “high”; (the Bond is fairly in line with its valuation). This is the final day of a comparably weak Q3 Earnings Season. And the Econ Baro rounds out its busy, declining week with October’s Existing Home Sales and Leading (lagging) Indicators.

At present, all eight BEGOS Markets are priced within their respective Neutral Zones for today; volatility is light-to-moderate. Gold’s 6-hour Parabolics confirmed a flip to Short at the open: this study qualifies to make the current list on our Market Rhythms page; (8 of the past 10 signals have followed-through to at least $2,100/cac). Most of the components — despite their uptrends per the Market Trends page — have begun to appear a bit toppy, the sole exception being the Bond by its firm upside progression. With but three days remaining in Q3 Earnings Season, only 58% of the reported S&P 500 constituents have bettered their bottom lines over Q3 of a year ago. Today the Econ Baro looks to November’s Philly Fed Index and October’s Housing Starts/Permits.

The Euro is the sole BEGOS Market at present outside (above) its Neutral Zone for today; the other components are within same, and volatility is mostly moderate. By Market Trends, all eight products continue to sport positive linear regressions per the past 21 trading days (one month). The “live” (futs-adj’d) P/E of the S&P is 37.5x; (its historical lifetime mean is 22.4x); and the yield curve remains flat-to-inverted: the 3-month U.S. T-Bill yield is 4.130% whilst 10-year money is 3.799. By our S&P MoneyFlow page, even as the Flow has improved in the past week, both the month and quarterly readings depict the S&P as 100s of points too high; by Market Values, the real-time reading of the Spoo (at 4012) shows as 255 points above the smooth valuation line. Too, the S&P has been “textbook overbought” these past four trading days. There is a substantive load of metrics due today for the Econ Baro: we’ve November’s NAHB Housing Index, October’s Retails Sales, Ex/Im Prices and IndProd/CapUtil, plus September’s Business Inventories.

A late post today as our host was in a “States overnight” server move. October’s wholesale inflation has come in at the same pace at ‘twas for September at a revised +0.2%; too, the NY State Empire Index for November comes in at a positive reading for the first time since July.  As such, we’ve presently the S&P +1.4% at 4014, with the Bond (along with the Spoo) above the Neutral Zone for today, whilst below same are Silver and Copper; volatility given this time of the session is moderate-to-robust, the Euro (1.04120) notably having traded 121% of today’s EDTR (see Market Ranges).  Of note by Market Trends in real-time, the “Baby Blues“ for Oil have dipped rather significantly since yesterday, even as price (85.43) is mildly up.  With all eight BEGOS Markets now sporting positive linear regression trends, Oil is the weakest of the bunch.

Lower is the watchword for the BEGOS Markets, all eight at present in negative territory to begin the week, the Dollar in turn getting the bid.  The Gold Update cites the key weekly parabolic trend as having flipped to Long with 1800s structural resistance in the balance, albeit by historical follow-through, price could make a run to 1900 during this trend.  By contrast, the missive graphically depicts the terribly overvalued nature of the S&P both by earnings and the long-term regression channel.  Last week’s surge across the BEGOS Markets’ board now sees these pricing extremes (in real-time) per Market Values:  the Euro is nearly 0.05 points “high” above its smooth valuation line, Gold as 81 points “high”, and the Spoo as 254 points “high”.  Whilst nothing is due today for the Econ Baro, tomorrow begins the week’s cavalcade of 17 incoming metrics.

Yesterday’s net points gain (+208) in the S&P 500 was its third largest in history, and by percentage net gain (+5.5%) its 15^th largest.  At present today, both Copper and Oil are trading above their respective Neutral Zones whilst the Bond is below same; BEGOS Markets volatility however already is moderate-to-robust, (not that unexpected given yesterday’s price surge in all the components).  The S&P’s gain has brought the “live” P/E up to an historically unsustainable 38.8x.  The retail inflation news led to a very surprising gap up in the Spoo (some +44 points in zero seconds), even as the pace of October’s headline number (+0.4%) was the same as that for September.  We shan’t rule out yesterday’s rally as a “one-day wonder” with a return to at least the 3600-3200 support zone in the balance.  November’s UofM Sentiment Survey comes due for the Econ Baro.

At present all eight BEGOS Markets are within their respective Neutral Zones for today, and volatility is again light. Hesitancy may be a function of still undecided StateSide election results and the reading later today for October’s CPI. We continue to point out that the S&P 500 by earnings remains significantly overvalued, and that the MoneyFlow suggests a sufficiently lower Index level in the balance. At Market Trends, whilst the linear regression stance of the Spoo remains positive, the “Baby Blues” thereto are indicative of the trend’s consistency breaking down. And by its Market Profile, the Spoo (at present 3761) shows the last notable apex supporter at 3728. Of note: the EDTR (“expected daily trading range”) of the Spoo by Market Ranges is now 95 points. In addition to retail inflation, the Econ Baro today also looks to October’s Treasury Budget.

StateSide elections remain undecided in various cases such that there’s been very little overnight movement in the Spoo, indeed in any of the BEGOS Markets. At present, all eight components are within their Neutral Zones for today, and volatility is light as best. Gold yesterday regained the 1700 handle; Silver too is back above 21. Our most notable concern is with the S&P, the “live” P/E now 33.0x — and per the MoneyFlow page — an extreme downside deviation of Flow from Price: this is a key leading indicator suggestive of material price decline in the making for the S&P, regardless if at first there is (if any) degree of post-election euphoria should Congressional power shift to the right. Today the Econ Baro looks to September’s Wholesale Inventories.

Both the Swiss Franc and Gold are at present below their respective Neutral Zones for today; the other BEGOS Markets are within same, and volatility is light with nothing due for the Econ Baro, but the StateSide elections in the balance. Should political power shift to the right, one would expect a robust upswing swing for the S&P, especially as the Econ Baro has been on the rise for several months; problematic thereto, of course, is that of which we’ve frequently written of late, i.e. lack of earnings support, inflation and rising interest rates, and expanding geo-political tensions. As per our Market Trends page, with the exception of the Bond and Gold, the balance of the bunch are in positive linear regression uptrends. Either way, given the elections, we expect markets’ volatility to increase later in the session into Wednesday morning.

On the heels of Friday’s notable gains, the entire BEGOS Markets’ complex begins the week in the red with all but the Bond and Spoo below today’s respective Neutral Zones; volatility is light-to-moderate. The Gold Update recognizes the yellow metal picking up needed ground (notwithstanding today’s weakness thus far), and that the S&P for a variety of fundamental reasons appears set to move substantively lower. A StateSide power shift to the right may quell any immediate stocks’ downside, however our better sense says the fundamentals will out in the broader term given rising rates, inflation’s steady pace, unsupportive earnings, and spreading geo-political concerns. ‘Tis a fairly light load of incoming metrics this week for the Econ Baro, beginning today with September’s Consumer Credit.

The Bond, Euro and Spoo all are trading at present within their respective Neutral Zones for today; the balance of the BEGOS Markets are above same, and volatility is already moderate-to-robust ahead of October’s StateSide Payrolls for the Econ Baro, with Copper having traded 114% of its EDTR (see Market Ranges). Copper’s trade month-over-month has been quite choppy with a mild upside bias: this make some sense given the red metal being a leading economic indicator that we’ve also the Econ Baro being on the upside throughout. By Copper’s Market Profile, trading resistance (just above the current 3.5160 level) shows at 3.54, with supports at both 3.47 and 3.43. The Dollar had quite a firm session yesterday, the Euro in turn triggering a Short signal by its daily MACD, (see Market Rhythms).

The Bond, Euro, Swiss Franc, Gold and Copper all are at present below today’s Neutral Zones; the other BEGOS Markets are within same, and volatility is mostly moderate. The FOMC voted to raise FedFunds as expected by +0.75%, the upper end of their target range now 4.00%; another +2.00% to 6.00% would place the rate in line with the Fed’s favoured inflation gauge — the Core PCE Index — the annual rate of which is also running at 6.00%. As a rather meager Q3 Earnings Season continues to unfold for the S&P 500 (the median earnings gain being +4.5%), that along with increasing geo-political tensions (RUS/UKR, NKor/SKor, IRN/SAU, CHI/TWN) gives us concern for lower S&P levels in the offing. Today’s busy incoming stream of metrics for the Econ Baro includes October’s ISM(Svc), September’s Trade Deficit and Factory Orders, and Q3’s revision to Productivity and Unit Labor Costs.

Unlike ’round this hour yesterday, seven of the eight BEGOS Markets are at present inside of today’s Neutral Zones, the sole exception being Copper above same; volatility is basically light ahead of the Fed for which a+75bp raise is the expectation; the FedFunds Futures “hint” of a +100bp hike, but we sense +75bp shall be released in the Policy Statement. By Market Trends, linear regression is positive for the Euro, Copper and the Spoo; such trends are negative for the Bond, Swiss Franc, Gold, Silver and Oil: therein however, we see little negativity by the Baby Blues of trend consistency, suggestive of these key markets benefitting from a bit of an inflation bid. Prior to the FedFunds hike come’s October’s ADP Employment report for the Econ Baro.

All eight BEGOS Markets are at present trading above their respective Neutral Zones for today, (thus obviously the Dollar is down); volatility is already moderate-to-robust, which at this hour a day ahead of an FOMC Policy Statement is a bit unusual. For the primary components by Market Values (real-time deviations): the Bond is some 5 points below its smooth valuation line, the Euro a point high, Gold 30 points low, Oil nearly 4 points high, and the Spoo 185 points high. Specific to the S&P, it has registered five consecutive days of being “textbook overbought”; the “live” P/E is 34.5x, and now through the halfway point of Earnings Season, only 58% of constituents have improved their bottom line over Q3 of a year ago. The Econ Baro looks to October’s ISM Index and September’s Construction Spending.

The Euro, Swiss Franc, Silver, Copper and Oil are all at present below their respectful Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility is light-to-moderate. The Gold Update acknowledges the StateSide recession is over (Q1 and Q2 REAL GDP having been negative) given Q3’s positive reading. The Econ Baro is showing a continuing uptrend, which with inflation at a steady pace ought see the Fed raise another 75bp come Wednesday; the Baro closes out the month with October’s Chicago PMI. Gold’s settle on Friday (1648) was the lowest weekly close since pre-COVID during February 2020; with Gold’s weekly parabolic trend remaining Short into an eighth week, the upper 1500s are not out of the question.

The metals triumvirate and Oil are at present trading below today’s Neutral Zones; the other BEGOS Markets are within same, and volatility is again at this time mostly light. The S&P from its 12 September high (4119) to its 13 October low (3495) looks to have completed a Golden Ratio retracement in topping out ’round 3881 on Wednesday: should that mark the end of this counter-trend rally, the severely negative MoneyFlow is suggestive of an S&P move toward the 3550-3350 area, (itself within the overall 3600-3200 support zone), especially with Q3 Earnings Season having not made a dent in the P/E ratio (the futs-adj’d “live” reading now 34.0x). Incoming metrics for the Econ Baro today include September’s Personal Income/Spending, the Fed’s favoured Core PCE Index for inflation, and Q3’s Employment Cost Index.

Today is long-anticipated StateSide Q3 GDP Day: by the rising Econ Baro during the Q3 metrics period, we anticipate REAL GDP to have turned positive, thus “officially” ending the recession, (politically perfect timing for the Democrat Party with the mid-term elections in the balance just 12 days hence; we expect the media/Dem flag-waving to capitalize on this throughout). Ahead of the data, all eight BEGOS Markets are at present within their respective Neutral Zones for today, and volatility is mostly light. Yesterday’s negative pull by MSFT on the S&P’s MoneyFlow was significant, typically suggestive of lower levels near-term for the Index itself. In addition to Q3 GDP, the Econ Baro also looks to September’s Durable Orders.

The Bond, Gold, Silver and Copper all are at present above their respective Neutral Zones for today; the balance of the BEGOS Markets are within same, and volatility is light-to-moderate. With 130 S&P 500 constituents having thus far reported for Q3, 57% have improved year-over-year; our “live” P/E (futs-adj’d) is 35.1x and the yield is 1.714%; five-year money is 4.257%. An intriguing Market Rhythm of late is the Yen’s 4-hour Parabolic study: since mid-August it has the best “r-squared” of swing profit consistency per the 405 studies we calculate each night. A day ahead of Q3 GDP — which by the Econ Baro may well be positive — we’ve September’s New Home Sales.

The Bond is the sole BEGOS Market trading at present outside (above) its Neutral Zone for today; the balance of the components are within same, and volatility is light compared to yesterday’s more moderate pace at this time. At Markets Trends, linear regressions have rotated to positive for the Euro, Copper, Oil and the Spoo; those for the balance of the bunch remain negative. The Bond by Market Values is nearly 9 points below its smooth valuation line; price is quite low as well vis-à-vis its Market Magnet. The yield curve remains flat with returns above 4% pretty much across the U.S. securities’ spectrum. Q3 Earnings Season too remains fairly flat with just 52% of reporting constituents having thus far improved, (i.e. 48% have not so done). The “live” P/E of the S&P is 34.7x; price itself is struggling north of 3800 as suggested by the recent references to it being a key “fib” retracement area. The Econ Baro looks to October’s Consumer Confidence.

The BEGOS Markets begin the week finding the Bond at present above its Neutral Zone for today; below same is Oil, and volatility already is firmly moderate. The Gold Update points to price getting a bit of respite within its broader downtrend, but that volume continues to be lacking toward supporting any material upside push. The Spoo’s high thus far this session (3813) satisfies two different Fibonacci measurings; whilst we don’t place a lot of emphasis on fib, ’tis interesting to see it come into play when other analyses are at bay. Too, the Spoo has essentially triple-tested the key 3600 support area; however for the S&P 500 itself, Q3 Earnings Season is thus far sufficiently lacking, the futs-adj’d “live” P/E now 34.7x, a level historically unsustainable in a positive interest rate environment, and thus suggestive the fundamentals will out via lower S&P levels. ‘Tis a quiet day for the Econ Baro ahead of an otherwise relatively busy week.