Aluminum breakout might be forthcoming as tariffs take hold

This remains a choppy market for US Equities in the near term as part of a stellar ongoing intermediate-term uptrend, which has shown no evidence of deterioration despite any of the recent DeepSeek and/or Tariff-related volatility spikes. Despite the positive recovery in Technology lately, the broader market continues to lag, and indices like Equal-weighted S&P 500, DJ Transportation Avg., and Russell 2000 remain well off highs hit last December. However, sentiment regarding tariffs and their possible negative implications for the US Stock market has gotten quite bearish for both the Equity and Bond markets in recent weeks, which I believe is a positive. I suspect that any weakness this week into/post-CPI should create an attractive opportunity for the back half of February. Rallies back to new all-time highs will take time, but it’s expected that the next large move should involve both stocks and Treasuries pushing back higher, not lower after this minor consolidation has run its course.  Intermediate-term trends are bullish, and pullbacks at this point will likely hold at 6000 before pushing up above 6121.  Such a move would likely coincide with a move up to 6300 initially with intermediate-term targets at SPX-6650.

The waiting game is here, and if Tuesday’s lack of volatility was any clue, traders might be more concerned about political uncertainty (tariffs, debt ceiling, Govt. shutdown) than any real worries regarding monetary policy. Given the tightness of the recent range in both SPX and QQQ, it’s expected that a breakout is nearing.

However, attempting to front-run this breakout might be ill-advised for those with short-term timeframes, as price has still failed to recoup the prior reversal which happened from last Friday.  Indeed, prices have largely moved sideways for the last couple weeks as part of a lengthier sideways range since early December.

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