tsptalk's Market Talk

[tsptalk]

The 10-year yield is pulling back to start the day after hitting 5% in the futures last night. The stock market doesn't seem convinced yet that it could be a peak as they are down as well.

Oil is up and the dollar is flat as options expiration week comes to an end after today.

Don't forget about the crazy streak of 15 straight positive Mondays for the S&P 500. Will they make it 16 or have they set us up for a black Monday?

 

[JTH]

Don't forget about the crazy streak of 15 straight positive Mondays for the S&P 500. Will they make it 16 or have they set us up for a black Monday?

Just for fun, here's those last 15 Mondays highlighted in Blue (not my work) TradingView user Airscape created the indicator.

 

[tsptalk]

I believe I mentioned this earlier in the month. I just can't find it... :blink:

With the S&P 500 down about 1.5% after October 20, this bullish tendency has 7 trading days to recover:

Image source: Carson Investment Research

 

[tsptalk]

10-year Treasury briefly hit 5% before pulling back...

The S&P is reacting with every move. FYI the bond market opens an hour before the stocks market.

 

[tsptalk]

It is shaping up to be a negative outside reversal day in the 10-year yield. It's early and that could reverse, but if it holds it could be a game changer for the algorithms. Whether lower yields are a good sign for the market or not is debatable, but recently it has all been about yields, and if they go down we could see some relief buying in the stock market.

 

[TommyIV]

It is shaping up to be a negative outside reversal day in the 10-year yield. It's early and that could reverse, but if it holds it could be a game changer for the algorithms. Whether lower yields are a good sign for the market or not is debatable, but recently it has all been about yields, and if they go down we could see some relief buying in the stock market.

Meanwhile, the stock indices charts look to be in a make-or-break situation. If yields just hit a peak for the short term, that could entice investors on the sidelines to catch a bounce and fuel a short-term rally in this oversold market.

 

[tsptalk]

Don't forget about the crazy streak of 15 straight positive Mondays for the S&P 500. Will they make it 16 or have they set us up for a black Monday?

I hope this doesn't jinx it.

 

[tsptalk]

Stillgaps in the C & S back at May 4th, and back at the mid 2020 time, when do those get filled

Good call, ridingthefundout. That gap finally got filled on the S-fund chart today.

 

[tsptalk]

I hope this doesn't jinx it.

I jinxed it. The S&P was up 30 points when I posted that. :smashfreakB:

 

[tsptalk]

Yields are up some as the 10-year yield ticked up to 4.87% this morning. But the dollar has erased all of yesterday's losses so I'm a little surprised stocks are as strong as they are in the first 30 minutes of trading.

Microsoft and Google (alphabet) report earnings after the bell. Both are up this morning and both charts look pretty healthy compared to many other stocks, and index charts. Is FAANG. MAGA, or the Magnificent 7, whatever they're calling big tech these days, the only game in town?

Oil is down modestly this morning, and as I talked about in today's commentary, the chart looks very vulnerable. The question is, how would the market react if oil broke down suggesting a possible economic slowdown?

 

[tsptalk]

OK, the pop up toward resistance happened. Now it may get tougher.

Earnings after the bell could gap it above resistance tomorrow, or they disappoint and the indices roll over again.

 

[tsptalk]

Yields and the dollar are up, adding some pressure to what seems like an overreaction to Google's earnings, if that is indeed the catalyst.

Technically, the charts are not doing well with the DWCPF (S-fund) touching the prior lows, and the S&P 500 flirting with Monday's low.

A test of the lows is common when trying to form a bottom, but there's no telling at this point if that is what is going on right now. It was only two days ago that the S&P 500 made that initial low. As I said, they are blaming this on Google, but failing at resistance again could just be telling us that it is a continuation of the downside after the brief relief rally.

We are probably due for a washout capitulation-like low to scare more bulls out, and maybe this is it. I'd look for a high volume sell off at some point that reverses later in the day, as a tell for capitulation. Today? Next week? next month?

 

[tsptalk]

It's getting serious, but it's not over yet for the bulls.

This is the weekly chart of the S&P 500. There's one crack in support, but two more levels are trying to hold here at today's lows.

A break below support (on higher volume), followed by a rebound back above support later in the day would be a good sign of capitulation. A close near the lows -- not so much.

 

[tsptalk]

There is more at play than seasonality, but just a reminder:

Chart provided courtesy of www.sentimentrader.com

 

[tsptalk]

Q3 GDP came in at +4.9%, which beat the consensus estimates of 4.0%.

Nothing recessionary yet, but interestingly yields are down on the stronger than expected data. The 10-year is currently 4.90% (same as GDP )

The dollar is reaching toward new highs, and that just keeps adding pressure to the I-fund, and equities in general.

Oil is down 1.5% to 84.09 this morning, and that's actually well off the earlier lows of 82.62.

Stocks are mixed as the high flying Magnificent 7 are getting hit hard, while the Dow is flat and small caps are up. Of course the Mag 7 are pulling the S&P and Nasdaq lower in early trading.

 

[tsptalk]

We've seen a nice little afternoon pop, but they don't always last into the close, and it's typical to close near the lows. However, if it does hold, the explosion higher into the close will be impressive and you'll see some chasing.

 

[tsptalk]

The market is trying to find some stability after a decent earnings report from Amazon last night. This is following some very erratic action after prior big tech earnings. The indices are mixed with the Dow and small caps lagging and the Nasdaq leading with the help of Amazon.

The PCE Pricing data came inline with estimates, so no issues there.

The 10-year yield is up slightly but basically flat as if hovers over the weekly lows.

The dollar is down a bit, so no major influence there today.

Oil is up this morning but it has come off its highs.

 

[tsptalk]

It's a big week with the Fed meeting Tues / Wed. and policy statement Wednesday, Apple earnings after the bell on Thursday, plus the jobs report on Friday.

Monday gap ups are hard to trust so you watch the reaction after initial pullback from the gap up. So far it's holding up, but there will be, and have been, rally sellers battling the bargain hunters.

Yields are up slightly, the dollar is down and the latter is helping the I-fund lead in early trading this morning. The EFA is trying to hold onto a 1% gain.

Small caps are lagging again, and are testing long term lows.

Oil is down sharply.

 

[tsptalk]

Investors are treading lightly while the Fed meets for day one of their two day meeting. The interest rate decision is tomorrow, and while no rate changes are expected, changes to the policy can always be a market mover.

The indices are mixed with small caps leading with a modest gain as the large cap indices bounce between positive and negative territory.

No big moves from either, but yields are down, and the dollar is up.

Oil and gold are up despite the move up in the dollar.

After yesterday's surprise big move higher in stocks, a little digestion of those gains is reasonable, but perhaps by this afternoon we will see more direction as it's a little choppy out there in the early trading. The bulls have an opportunity barring any unforeseen move by the Fed, so let's see if they can take advantage.

 

[tsptalk]

Interesting move in stocks and bonds before the 2PM Fed decision and policy statement. Investors are either optimistic, or scrambling to cover short positions (buying to cover) this morning.

Seasonality is in play and as JTH pointed out in a Blog post yesterday, when it works, it works.

Bond yields are down sharply - a bold move in front of a Fed meeting.

Gold continues to fly higher, oil is up today, again with no help from the dollar which is flat today, but made new highs earlier.

Overseas markets are bright green as well with Japan's Nikkei up 2.4% last night.

Brace yourself. Things are going to get whippy in a few hours. Are "they" sucking us in so the Fed can pull the rug out from under us? The charts are improving but there's still a lot of overhead resistance.