Market Commentary: Markets This Week
Summary
- Monday Expected SPX Closing Range: 3918-3968.
- Monday Expanded Expected SPX Closing Range: 3874-3999.
- SPX Tilt: Slightly Bullish.
- NASDAQ: Bearish.
- Russell 2000: Bullish.
The S&P looks to have a boring week ahead. There isn't much reason to expect a whole lot of movement one way or another at this juncture. Volatility should contract a bit even from these relaxed levels but the juice probably isn't worth the squeeze to short VIX here.
We're looking at a slow-grind up on the S&P 500. The Russell 2000 remains the most exciting long play here. And, the NASDAQ continues to languish in weakness. The NASDAQ is certainly deposed as the market leader and shows no signs of regaining that leadership position soon.
Emerging Markets may be ripe to short. While in the long-term I am very bullish on emerging markets, right now they're at the top end of a bullish range. A break above the level would turn me bullish but the current thesis is a bearish breakdown and an opportunity to make some money on the short side.
U.S. Treasuries continue to be bearish. Rates continue to rise. I will continue to short bonds both intermediate and long term.
Precious metals are neutral to bearish. Metals remain boring while they sit right above key long-term support. I anticipate that we will see those levels break and further weakness coming in metals but not this week. I will probably not be trading metals at all in here unless we can see a break of those key levels at which time I will be happy to jump in and short them.
Currencies:
The U.S. Dollar continues to show strength since the beginning of the year. After the large gains we saw recently, I pulled out and have waited for some consolidation. I still view the USD as a bullish play, but nobody likes dead money, either.
The Canadian Dollar is strong and I will be a buyer as it shows signs of strength and a recent breakout in price action.
The British Pound looks strong and maybe a potential long.
The Japanese Yen is unbelievably bearish and has broken key support recently. This is a nice short opportunity there.
That's my weekly rundown! Back with more on Tuesday.
Happy Trading!
Analyst's Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in RTY over the next 72 hours.
I am currently short 10-Year US Treasuries, Precious Metals, and the Technology Sector. I am currently long small-cap stocks. I have an additional market-neutral approach in a separate account that is short SPY and long XLB, XLE, XLF, and XLI.
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