The Commodities Super Cycle is Underway!

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S&P 500

the S&P 500 jumped to a new record high yesterday on signs that inflation is cooling. CPI came in at 3.4% in April year-over-year and lower than the March 3.5% print. It was enough to spark a broad-based rally as Treasury yields and the U.S. Dollar sold off. The Dollar broke below the 50 DMA, further sparking long liquidation. Our proprietary trend discovery system shifted from bullish to neutral. 

The key level today is pocket support from 5310-5300. A move back down to this level could support another rally back to 5330-5335, and a break below 5300 could signal a move back to 5275. Many of you are bearish on the market, and with this type of chop, I find that options could be a calculated risk way for traders to position for a correction. Remember, there are smaller, highly liquid micro S&P 500 options. 

Today, we will see initial claims, which came in at 231,000 last week versus expectations of 215,000 and further ignited a rally. 220,000 seems to be the pivot where a number below could trigger a wave of profit taking in markets after yesterday’s rally. 

Crude Oil

The daily chart pattern continues to trade in sideways action, with $76.50 on the downside and $78.00 on the upside. A break above $79.30 could target a move back to $80.00, while a break below $76.90 leaves a greater move down to $75.60 in the picture. 

Copper – Year to date, up 25% 

There is a push for increased electric power use because the green energy revolution, rising E.V. Vehicle demand, and advancements in A.I. have all strained the out-of-date electrical grid. The combination pushes demand for copper, silver, and other metallic metals higher for the first time in a decade. That comes at a time when increased regulation makes it harder to bring on additional supply. 

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