Speculating On The U.S. Market In 10 Charts

In Marketfield Asset Management’s most recent Weekly Speculator report, analyst Michael Shaoul assesses the state of the U.S. equity and commodity environment by taking a look at 10 telling charts. Here’s a breakdown of what Marketfield had to say about each chart.


The bull market in the S&P 500 appears to be on hold for the time being, as the index has been range-bound since the end of February. Until the index breaks above 2130 or below 2040, the next major directional move will remain hard to predict.


The Nasdaq continues to show relative strength compared to the S&P 500, and Marketfield sees support for the index at 4500 and 4350.


While the S&P 500 and Nasdaq were both recently able to establish new higher lows, the Russell 2000 broke below its May lows and is now looking vulnerable to a move lower.


While the S&P 500 has been confined to its narrow trading range, the volatility index’s recent breaches of its trading range demonstrate “how jittery investors seeking protection are.”


Marketfield believes that the emerging markets index could soon re-test its 2011 bottom at 875 after recently breaching its 900 support level.


Marketfield calls the recent FOMC statement “remarkably light” and doesn’t see anything “dramatic” happening in the near-term for U.S. treasury yields.


After finding support near its 50-day average, Marketfield now believes that a break of resistance at 98 and a test of the highs at 100 is likely for the DXY.


Marketfield continues to see massive investment outflows from gold and points out that the only good news for investors is that the metal has not yet recorded bear market lows in most global currencies.


Speaking of bear markets, crude oil continues to display signs of a classic bear market. Marketfield is watching the $42 mark and believes that a test of this key support level is likely on the way.


According to Marketfield, copper’s breach of its July 8 low of $5,240 does “serious technical damage” to the copper market, and the firm believes copper will continue to trend downward toward $5,000.