Fireworks to Go On?

New Year Resolutions: what to watch in 2022? | MarketTalk: What’s up today? | Swissquote

S&P 500 sharply extended gains, and credit markets indicate some continuation even if by pure inertia. A trend in place, stays in place until reversed – and yesterday‘s upswing was sufficiently supported by the credit markets. The late day retreat in HYG is an obvious warning of a pause possibly coming next, but not of a reversal – the improvements in market breadth speak for themselves. So, I‘m looking for a lean day today, and I‘m keenly watching bonds and cyclicals such as financials for further short-term direction clues.

While yesterday‘s upswing was driven by tech, the daily rise in yields and inflation expectations (however modest) was balanced out by still more yield curve compression. The risk-on turn in credit markets isn‘t over, and the key question is whether HYG can extend gains or at least go only sideways for a while.

Today‘s key premarket news propelling risk assets up, was about Pfizer extolling its three-dose alleged efficiency against Omicron – even though the news was sold into shortly thereafter, it has the power to buy more time and provide fuel for stocks and commodities. The copper weakness remains the only watchout in the short term, and silver sluggishness reflects lack of imminent inflation fears. As if the current prices accurately reflected above ground stockpiles and yearly mining output minus consumption. It‘s the same story in the red metal, by the way.

Patience in the precious metals – it‘s about Fed either relenting, or placing inordinate amount of stress on the real economy, which would take time. Spring 2022 most probably would bring greater PMs gains than 2021 with its fits and starts – aka when inflation starts to bite the mainstream narratives and stocks, some more.

Let‘s move right into the charts (all courtesy of

S&P 500 and Nasdaq Outlook

Fireworks to Go On? - 1

S&P 500 gapped higher, and is once again approaching ATHs. Hold your horses though for it would take some time to get there. I would prefer to see broader participation within value, which isn‘t totally there at the moment. It‘s improving, but still.

Credit Markets

Fireworks to Go On? - 2

HYG upswing was considerably sold into, and that spells some consolidation ahead. The degree to which it spills over into stocks, remains to be seen.

Gold, Silver and Miners

Fireworks to Go On? - 3

Precious metals are still looking stable, and ever so slowly improving after the Fed hawkish turn hit. The central bank and real yields projections hold the key, but the countdown to higher prices is firmly on.

Crude Oil

Fireworks to Go On? - 4

Crude oil upswing indeed continued, and black gold looks set to consolidate gains unless value stocks spring some more to life later today. Anyway, the medium-term chart remains bullish.


Fireworks to Go On? - 5

Copper is another reason why I‘m not overly bullish for today – the red metal‘s base building looks to need a bit more time to play out.

Bitcoin and Ethereum

Fireworks to Go On? - 6

Bitcoin and Ethereum are still base building, and looking vulnerable. While a downswing isn‘t guaranteed, it can come and turn out to be sharp.


  1. S&P 500 is likely to consolidate recent strong gain, not accelerating the surge today. The bulls within risk-on assets look to be slowly gaining the upper hand, and the opening part of today‘s analysis describes it‘s not a one-way street to fresh highs as the Fed has turned from a tailwind to a headwind.

Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

New Year Resolutions: what to watch in 2022? | MarketTalk: What’s up today? | Swissquote

Monica Kingsley

Monica Kingsley is a trader and financial markets analyst. Checking dozens of charts daily, she integrates their messages with economics and in-depth experience. Trade calls and writing are her cup of tea as much as studies in market histories. Having been at the financial markets when the Great Recession arrived, she experienced many bull and bear markets - be it in stocks, bonds, gold and silver. Check her out at