The S&P500 ($SPX) starts this week in roughly the same position as laset week, and the week before, and the week before that…~2% above the 50-day and ~11% above the 200 day.
2021-06-13-SPX Trendline Analysis - Daily
The ADX still shows a weak bullish trend in play, but the index didn't see any distribution last week. The price/volume signal remains mixed though, as the total count still has a couple more days to work off.
2021-06-13-SPX Elliott Wave Analysis - Daily - Primary 1
Elliott Wave continues to show an uptrend.
Inflation was on everyone's mind last week, with the consumer price index (CPI) up 5.0% from a year ago. Core CPI, or the one without food and energy costs, rose 3.8%. Those are pretty steep numbers, even if they really are "transitory" like the Fed suggests. So far, the bond market appears to agree, as yields continue to drop.
The year over year comparison was always going to be dramatic, since economic activity was so depressed last year at this time. But reopening demand, combined with supply chains issues and shortages, is a recipe for higher prices regardless of economic starting points.
I'm assuming we'll see a spike in inflation and then it will ease off a bit as supply chains get sorted. However, I think inflation levels remain elevated, and and just "seem" lower when compared to the spike for year over year comparisons.
Best to Your Week!
Once a year, I review the market outlook signals as if they were a mechanical trading system, while pointing out issues and making adjustments. The goal is to give you to give you an example of how to analyze and continuously improve your own systems.
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