On Tuesday, investors were attempting to gauge just how much selling pressure was coming into the market as the S&P closed at its lowest level in over a month and flirted with a critical level that bears argued will not hold.
Specifically, the S&P 500 ended below its 50-day moving average for a second straight day. According to technical analysis, the 50-day, now at 1,324.59, could turn into a hurdle for the benchmark to reestablish a strong uptrend.
That would suggest it’s time to profit and protect.
However, a note from Goldman Sachs really captured the attention of the Street and worried short sellers. The firm made decidedly bullish calls raising its price forecasts on a slew of commodities including crude oil and industrial metals and they reiterated their positive view on gold.
“We now believe that the risk/ reward once again favors being long commodities," say Goldman analysts. "We are shifting back to a near-to medium-term overweight recommendation.”
And it’s not just Goldman. Morgan Stanley also boosted its oil forecast.
Considering commodities and related sectors drove the market to a new bull high in the first place, are Goldman and Morgan trying to tell us that the sell-off is just about over.
How should you position now?