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Equities have extended gains and have now come within striking distance of late March peaks.   SPX has nearly recaptured all of the period of weakness from late March into April, and likely will test and break out above resistance as US Dollar and US Treasury yields start to weaken. The uptick in Financials, Materials, and Industrials are constructive factors towards helping the market begin to show more broad-based strength.   Additionally, Small and Mid-cap styles have come back to life over the last week and this recovery is also important despite it being in its infancy.  Overall, I expect that SPX has little resistance ahead of late March highs at 5264.85 and eventually can exceed this as the rally grows stronger into June with targets near 5400.

Equities have slowed the pace of their ascent ahead of this week’s important CPI data, which likely could serve as a catalyst for Equities, Treasuries and the US Dollar this week.

Specifically, any CPI print that shows signs of prices easing could be promising for Equities as the price of both US Dollar and US Treasury yields start to fall.   Both $DXY and $TNX lie near important short-term support heading into Wednesday’s CPI re...

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