In today’s briefing:
- Russell 2000 Breakout Attempt Underway; Small-Cap Breadth Improving; KRE, KBE, XRT Test Key Levels
- WTI and Gold Targets
Russell 2000 Breakout Attempt Underway; Small-Cap Breadth Improving; KRE, KBE, XRT Test Key Levels
- The S&P 500 broke above 4200 and the 2-month megaphone pattern on Friday, and is already approaching the 4300-4325 area which we have anticipated would cap upside for 2023.
- While we would be cautious at these levels given our expectation for inflation to remain elevated, we cannot get too bearish if the S&P 500 is above 4165-4200.
- Breadth remains weak within the S&P 500, but we are starting to see breadth improvement within small-cap Russell 2000 (IWM). More on that below, IWM targets include $190 and $200-202.
WTI and Gold Targets
- Oil and gold remain under pressure due to a firm US dollar. Use strikes to the downside in oil to re cycle a short near 75 resistance.
- Our sell call in gold at 2,060 is pressing below 1,980 with a target of 1,900 where we start to probe for an intermediate cycle low.
- We view this as a tactical pullback within a more bullish macro cycle. USD counter play.
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