Commodities Reassert
Their Bullish Trend

by | Apr 18, 2022

Key Points

  • The S&P 500 Continues to Fade from Resistance
  • Small Caps Close Higher on the Week
  • The NASDAQ 100 Remains Under Pressure
  • Ten-Year Note Breaks Below $120
  • Commodities Look to Reassert the Bullish Trend

U.S. Equities

The S&P 500 closed lower in the holiday-shortened week, with the decline taking the index below the 10-week moving average after it was rejected at the 40-week moving average in the prior week. The 14-week RSI continues to move lower as momentum shifts in favor of the bears. Important support at the 4,200 level is in play if the index is below the moving averages.

The S&P Small Cap 600 managed to close higher on the week but was not able to break above the 10-week moving average while remaining below the 40-week moving average. Support near 1,220 is still in play with the index below the moving averages. The 14-week RSI is holding 40 but has been making lower highs since failing to become overbought in November.

The relative trend is bearish below resistance.

The NASDAQ 100 closed the week below the 10 and 40-week moving averages to test the support zone between 13,000 and 14,000. The 14-week RSI has been in a downtrend since November, indicating that momentum may be shifting in favor of the bears.

On a relative basis, it was another week of underperformance as the ratio moved further below the resistance level.

U.S. Fixed Income

The 10-Year Note was lower again last week, extending its move below the declining moving averages to break below the $120 level. This brings the 2018 lows near $118 into play.  

The yield continues to move to the upside, keeping the 3% level in its sights.

Global Equities

The Global Dow continues to dance with the 10 and 40-week moving averages while closing lower last week. The index remains in the consolidation that has been in place since last June, keeping the trend in a neutral position. The 14-week RSI confirms the neutral price trend as it trades in the middle of the range.

The relative trend remains below resistance in a choppy consolidation that has marked trading for more than a year.

Commodities

The Bloomberg Commodity Index remains in an uptrend, above the rising 10 and 40-week moving averages. After stalling for the prior five weeks, the index appears to be reasserting its uptrend as it looks to attack resistance at the 140 level. Momentum confirms the bullish price trend as the 14-week RSI remains overbought.

Take-Aways

Stocks remain under pressure in the U.S. and globally as rates continue to climb. The major averages are below key moving averages, increasing the odds that important support levels will be tested. At the same time, commodities have begun to resume their uptrend, putting an important resistance level in their sights. 

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