Traditional market analysis 09/06/2021 #2
Hello everyone! Quick update on the current situation with several charts below. Currently I am still bullish on Oil and bearish on the USD. The USD hasn't managed to bounce and across many pairs it either keeps breaking down or keeps testing support. For example USDCNH has clearly broken down and GBPUSD looks ready for a breakout.
Currently metals don't look all that bullish, however bonds seem to be getting stronger and stronger bouncing off key support. I don't think we'll have a massive inflation spike and that this will be transitory, but transitory might mean higher inflation for a few years as the world is slowly getting back to normal and potentially Central banks cut down a little bit on the printing. Of course there is inflation and there will be more for some years but it won't be like the 1940s or the 1970s. Yes with oil prices going higher and higher there will be an issue and the same goes for several other things like Copper.
At some point inflation will hurt stocks, however for now they look pretty strong. To me all US indices are looking very strong despite all the bad numbers, potential tax hikes and so on. Maybe they are focus on the additional spending and stimulus coming than any of the other big problems. For now I see no issues with the current trend and although stocks are 'expensive' and there are many issues with the current valuations, don't forget that in the current environment they benefit through multiple ways. Also don't forget that we haven't seen a blow off top or a proper bubble formation and until we see that things could keep expanding.
Yes one or several15-30% drops will come at some point in the next 6-12 months and I have no doubt about that, but until I see key support levels being broken I am more bullish than bearish. If the Russell 3000 closes below 2400 points then we might have a problem. The market seems to have a very clean bullish structure and it could actually accelerate to the upside than going down at the moment. It is up about 15% this year and it could keep going higher as more and more money is printed.
s3.tradingview.com/snapshots/f/fPRCt5u3.png
s3.tradingview.com/snapshots/z/ZRqlpou2.png
s3.tradingview.com/snapshots/n/nFDe3Ogg.png
s3.tradingview.com/snapshots/b/ByMOllrK.png
s3.tradingview.com/snapshots/v/vtYn4t7P.png
s3.tradingview.com/snapshots/y/yhWgic2V.png
s3.tradingview.com/snapshots/d/dvtjzlwL.png
Currently metals don't look all that bullish, however bonds seem to be getting stronger and stronger bouncing off key support. I don't think we'll have a massive inflation spike and that this will be transitory, but transitory might mean higher inflation for a few years as the world is slowly getting back to normal and potentially Central banks cut down a little bit on the printing. Of course there is inflation and there will be more for some years but it won't be like the 1940s or the 1970s. Yes with oil prices going higher and higher there will be an issue and the same goes for several other things like Copper.
At some point inflation will hurt stocks, however for now they look pretty strong. To me all US indices are looking very strong despite all the bad numbers, potential tax hikes and so on. Maybe they are focus on the additional spending and stimulus coming than any of the other big problems. For now I see no issues with the current trend and although stocks are 'expensive' and there are many issues with the current valuations, don't forget that in the current environment they benefit through multiple ways. Also don't forget that we haven't seen a blow off top or a proper bubble formation and until we see that things could keep expanding.
Yes one or several15-30% drops will come at some point in the next 6-12 months and I have no doubt about that, but until I see key support levels being broken I am more bullish than bearish. If the Russell 3000 closes below 2400 points then we might have a problem. The market seems to have a very clean bullish structure and it could actually accelerate to the upside than going down at the moment. It is up about 15% this year and it could keep going higher as more and more money is printed.
s3.tradingview.com/snapshots/f/fPRCt5u3.png
s3.tradingview.com/snapshots/z/ZRqlpou2.png
s3.tradingview.com/snapshots/n/nFDe3Ogg.png
s3.tradingview.com/snapshots/b/ByMOllrK.png
s3.tradingview.com/snapshots/v/vtYn4t7P.png
s3.tradingview.com/snapshots/y/yhWgic2V.png
s3.tradingview.com/snapshots/d/dvtjzlwL.png
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