The S&P 500 ($INX) remains in a major (long-term) downtrend. April was interesting as the $INX completed a number of bearish technical patterns:
- The monthly close of 4,131.93 was below the previous 4-month low close of 4,373.94 (February 2022)
- Based on classic Dow Theory, the next downside target for the $INX would be the 33% retracement level of 3,422.48 (dashed blue line).
- Note the $INX also competed a head and shoulders top during April
- This has a downside target of 3,981.70 (dashed red line)
The US 10-year T-note (ZN) extended its major (long-term) downtrend to a low monthly close of of 119-050. The next downside target is the previous major low of 118-140 from October 2018. If that level fails to hold, the next area is between 115-145 and 113-025 from December 2009 and October 2008 respectively. Then, way down below that is the June 2006 low monthly close of 104-275. Monthly stochastics are already well below the oversold level of 20%.
Gold remains a difficult read with the monthly close-only chart showing, generally, a sideways pattern. The bigger picture would suggest a possible major (long-term) downtrend, though I would be wait for a new 4-month low close before getting aggressively bearish. This puts support during May at $1,799.20 (January 2022). It’s possible investors are using short-gold as a hedge against more fundamentally bullish commodities, one of the factors that could be keeping a lid on gold while so many other markets are posting dramatic rallies.
WTI Crude Oil extended the major (long-term) uptrend on its monthly close-only chart with April’s close of $102.75. The market has moved into the trading range between $113.93 (April 2011) and $79.20 (low September 2011), with resistance possibly in the $107.70 area. Fundamentally the market remains bullish as the forward curve steepened from the end of March though the end of April. Additionally, the June gold/June crude oil closed April at 18.24 (barrels of crude oil per ounce of gold). This was the lowest since 18.56 at the close of October 2018.