tsptalk's Market Talk

[retread]

Things are getting parabolic. That doesn't have a good ending.

 

[Bullitt]

Heavy short covering of VIX options before OpEx and market being closed on Monday? Shorting the ETF VXX has been a sure thing long run, but it does have periodic big up day shake outs.

 

[tsptalk]

Expiration days are usually a lot less volatile than you might think, except every time I say that, we get a big move.

 

[tsptalk]

Expiration days are usually a lot less volatile than you might think, except every time I say that, we get a big move.

It's one of those quiet expiration days - at least so far with two hours left. The VIX is down over 6%.

The VIX tends to be stronger on Mondays than Fridays.

 

[tsptalk]

The Nasdaq 100 (large cap tech) has been leading the charge for stocks all year. Can it keep up this pace without a meaningful pullback first?

 

[tsptalk]

The dollar is popping today putting the pricing pressure on stocks and commodities. The I-fund is lagging because of it...

 

[tsptalk]

Day 3 of a pullback. In a bull market this is where you'd expect to see dip buyers come in, and the short-term support line is being tested now. Otherwise the 4250 area and the open gap could be next.

High Yield Bonds are breaking down a bit after a failed breakout, but it's remains above the 50-day EMA. A yellow flag.

 

[tsptalk]

Treasury yields rise as Powell reaffirms the Fed is not done hiking

The yield on the 10-year Treasury rose by more than 2 basis points at 3.756%. The yield on the 2-year Treasury traded 3 basis points higher around 4.728%.

https://www.cnbc.com/2023/06/21/us-treasurys-investors-await-comments-from-fed-chair-powell.html

 

[tsptalk]

This looks good, after a successful test of the breakout area.

 

[tsptalk]

The dollar is rallying putting pressure on the market.

Yields are down reversing yesterday's rally, so bond prices are up and this may be the start of the end of quarter "rebalancing" after stock easily out performed bonds in the 2nd quarter.

 

[tsptalk]

Smalls come out leading to start the week as a case can be made that there are open gaps above that need attention after all of the gap down openings last week. I think it would be surprising if this can start a new leg higher without testing its 50-day EMA first, although that was a pretty serious pullback already, and perhaps last week's lows weren't as arbitrary as it looks.

The 50-day EMA is about to cross above its 200-day EMA, which is a good sign for the intermediate term, but as we saw last week, tends to come near a short term overbought pullback.

 

[nasa1974]

Fingers crossed.

 

[tsptalk]

I don't know if we should be as concerned about the PMO indicator crossover as the previous times because of the new positive trend and what looks like the end of a bear market, but it did just crossover again.

 

[tsptalk]

The dollar is jumping this morning after Tuesday's gap fill. I believe that is adding pressure to the stock market, although correlation isn't exact. Stocks are flat but off their opening lows.

 

[tsptalk]

As I mentioned in today's commentary, there was some rising support and a bull flag on the 10-year yield so today's breakout shouldn't be a surprise. But I was thinking the F-fund could move higher since it was clinging to the moving averages. Not today. (bonds and the F-fund move counter to yields.)

GDP and jobs data came in stronger than expected: https://www.tsptalk.com/mb/the-economy/38317-gdp-gross-domestic-product-post688591.html#post688591

Fake out or break down coming?

 

[tsptalk]

The catalyst for the sell off in the S-fund earlier in the year, the decline in the regional bank sector, isn't showing many signs of improvement, or at best, the bounce off the lows seems to be running out of steam below multiple levels of resistance.

 

[rdodson]

If I read the ‘tea leaves’ correctly…. The 2 year treasury is 1% higher than the ten year note. Fed will raise rate again? Third year of Presidential term is usually bullish. But nothing is normal —- right now.
Should we be surprised with the weakness of chart? Does not seem like we are out of bear market.

 

[tsptalk]

Quiet, mixed holiday trading.

The indices are near flat right now, except small caps which are doing well. Bonds are also flat, losing their morning gain.

We have the normal noon ET IFT deadline but the market closes at 1 PM ET.

Enjoy the 4th!

 

[tsptalk]

The early negative action has been bought so far as has been the knee-jerk reaction lately, but this morning the charts are trying to repair some open issues - or opens gaps.

We see some losses in small caps but the S-fund (dwcpf) has filled it open gap from last week already this morning, while the S&P 500 may be in the process.

The question will be if the bears will push back again and sell this rebound off the opening lows, and start a post holiday reversal.

Correction:

The FOMC meeting minutes will be released later today.

 

[tsptalk]

The comeback from the morning lows was impressive, but we're seeing some fairly deep internal weakness so far as of 10:22 AM EDT. One outlier is the Nasdaq share volume, which is quite positive depiste nearly 2 to 1 decliners to advancers in the index.