Sp'monthly
sp'monthly2, rainbow
Copper, monthly
WTIC Oil, monthly
Summary
The market almost seemed to want to spite the bears into the close, with a fractional new high of sp'1597.57. That made for a monthly gain of 28pts (1.8%) which is certainly nothing to be dismissed.
Primary trend remains higher, as the rainbow chart clarifies. A simple green bullish candle, the fourth consecutive one, and its now been 20 months (Sept' 2011) since we had a red candle.
With ongoing QE-POMO, and an absence of 'black swans', why would May see any declines?
Oil and Copper - still presenting moderate deflationary warnings
Oil and Copper declined by 3.8 and 6.4% respectively across April. Both closed the month well off their lows, so the monthly price action was actually more impressive for the bears than it might initially look.
For me, Copper is the big one to watch. The big $3 level is an absolutely critical one, and if we see sub 3s at any point in May, the bulls should be at least 'somewhat' concerned..
Similarly, a break < $80 for Oil would be a major issue, and open the door to what a fair number of analysts are saying - 'WTIC Oil in the 50s'. Right now, that is of course a very long way down, but April did see some serious downside.
Looking ahead
Wednesday has the ADP jobs number, ISM, construction, and the weekly EIA oil report. Infinitely more important though is the FOMC. An announcement is due at 2pm, I'm unsure if the Bernanke will be doing a follow up press conference.
Unquestionably, this month has been a real disappointment for those in bear land. The April declines have been fully reversed, and we have closed the month with new highs on the SP and Nasdaq.
May can only be better...right?
Goodnight from London