Trend & Cycle Roadmap - May 20th

May 20, 2021 | Connor Ryan


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May remains volatile as the S&P meanders across its uptrend channel - 3983-4000 first support. US 10-year yields still range bound despite inflation concerns. Key levels: 1.53%-1.70%. What is gold indicating about inflation?

Key points discussed in this week’s Roadmap:

  • Equity markets - We view technical analysis as the rumble strips for financial markets, alerting investors to markets changing lanes.  May continues to live up to its reputation as a volatile month as the S&P chops across its 7-month uptrend channel. Key support remains near the low end of the channel, at 3983-4000 first support.
  • Interest rates – Despite inflation worries, US 10-year yields remain  range bound with key rumble strips at 1.53%-1.70%, followed by 1.77% on the upside. 
  • Gold - What is gold indicating about inflation? 1965 and 2075 are key upside technical levels signaling mounting inflation concerns, while a move below 1670 would suggest gold is following the pattern that developed in 2011-2012.

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Connor Ryan

905-895-4102

connor.ryan@rbc.com

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Economy Markets