Catalysts This Week: S&P 500, Gold, Bonds, Dollar (Video)

We want to review key securities' technicals and fundamentals along with what we expect for this week.








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The below report is a sampling of what we offer Pro Trader subscribers every morning; concise, actionable calls based on fundamentals and technicals daily in SPY, gold, bonds, currencies and stocks. Any questions, please let us know. We're here to help.

S&P 500 Index: BULLISH
SPY Chart
Charts by Interactive Brokers
This chart increases in importance. SPY (S&P 500 Index ETF) looks like it may have consolidated back to the uptrend that we drew. That uptrend is formed from the up-move following the elections.  

We'd expect it to maintain this upward trajectory.

We still think May 22nd was a level that we may not break this year. It's a big call but we're sticking to it.

Our short term signal on the SPY just went bullish which is the first time in several weeks but it can change any day.

Non-farm payrolls reported a weak number a month ago and the market had trouble hitting new highs. Now with a strong number reported Friday investors can have confidence again.

Add to that the coming earnings season.  Q1 saw the strongest earnings growth for S&P 500 Index companies in almost six years. We expect a strong Q2 as well.

You now have strong jobs and strong earnings which in combination can help the S&P 500 Index ETF SPY hold that uptrend.

Pit that against a build in bearishness. Listen to AAII the Association of Individual Investors,

"Pessimism about the short-term direction of stock prices rebounded to a six-week high."

Good technicals, good fundamentals and lots of skepticism should bode well for stocks.

Events This Week

Fed Chair Janet Yellen speaks before Congress Wednesday and Thursday.

CPI reports on Friday. It's been very low. Low inflation is good for stocks and bonds and negative for gold.

GOLD: BEARISH

ETF GLD Chart
ETF GLD

We are very bearish on gold. If GLD (Gold ETF) breaks 114 it has very limited support below and can head even lower.

Low inflation in combination with Fed tightening are probably the main fundamental drivers of this gold drop.

BONDS: CHANGE TO BULLISH

20 Year Treasury Chart
ETF TLT

We've had a change. After this big drop we're getting bullish again.
This has been a big swift drop. It's not the safest call but it does look like we are still in an uptrend. We also drew a horizontal line with some arrows showing you what could be a key support-resistance that bonds can hold at right here at these price levels.

Bonds can hold for a few reasons.

*The Fed is tightening which creates growth concerns, dropping rates. (Even though we don't believe the growth concerns)

*The Fed did not yet taper. Even tapering will keep the Fed buying in the open market only less so. Bonds still have support.

*Baby boomers are not letting go of their bonds so fast.

For these reasons, after a nice drop along with technical support, we think there is a better chance bonds can work their way back higher.

DOLLAR: NEUTRAL 

US Dollar Chart
ETF UUP

We have another opportunity to buy the dollar for a bounce. We like politics in the US and are guessing that bad-politics bottomed. Low inflation is good for the dollar. If we close higher than 24.9, where we drew the horizontal line, we want to buy.

Let's Wrap It Up

Stocks may be getting people bearish but they're still in an uptrend. We worry about gold but are looking to get more constructive on bonds and the dollar.

Good luck

By: Chaim Siegel, Elazar Advisors, LLC

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