tsptalk's Market Talk

[tsptalk]

We got a weaker than expected Consumer Sentiment Report this morning before the opening bell and the futures made a U-turn from positive to negative, but in the first 90 minutes of trading, the S&P has been rebounding back some.

It's important to note that the data was collected before the trade deal with China was made. I don't know how much that makes a difference, but certainly some.

Yields gapped down on the news as well, but they've bounced back to almost fill the gap already. The 10-year yield is down and the small caps are leading with the help of these lower yields. The F-fund is also up on the lower yields.

The dollar is up and it is looking more like the gap fill completed a task and the UUP may be ready to rebound again although it remains below the key moving averages. This rally in the dollar is causing the I-fund to lag this morning.




Oil and bitcoin are up while gold is pulling back.

 

[The_General]

We got a weaker than expected Consumer Sentiment Report this morning before the opening bell and the futures made a U-turn from positive to negative, but in the first 90 minutes of trading, the S&P has been rebounding back some.

It's important to note that the data was collected before the trade deal with China was made. I don't know how much that makes a difference, but certainly some.

Yields gapped down on the news as well, but they've bounced back to almost fill the gap already. The 10-year yield is down and the small caps are leading with the help of these lower yields. The F-fund is also up on the lower yields.

The dollar is up and it is looking more like the gap fill completed a task and the UUP may be ready to rebound again although it remains below the key moving averages. This rally in the dollar is causing the I-fund to lag this morning.

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Oil and bitcoin are up while gold is pulling back.

FOMO is killing me but I'm sitting patiently on the sidelines..

 

[tsptalk]

There are many differences between 2020 and today, but just looking at the two charts, it would seem reasonable to expect another test of the 50-day average in the coming days / weeks. That may be the time?

 

[tsptalk]

Stocks opened sharply lower on Monday morning, but maybe not as bad as you might expect after the first downgrade of the the US credit rating by Moody's since they started rating us in 1919. The two other major credit agencies, S&P and Finch, downgraded the US years ago.

Relative to recent volatility, this is nothing unusual so far. The initial buy the dip reaction is a little surprising, but its a little early for the bulls to declare victory. If the indices close positive, that would be quite a statement, but buying the initial dip is so far knee-jerk action - filling in the open gap.




Yields spiked early but the 10-year hit the overhead resistance and backed off in early trading. There is a big gap still open near 4.45%.



Oil is flat, gold is up, and bitcoin is down a bit.

The close is going to be more telling than this early action.

 

[tsptalk]

We have some modest weakness to start the morning for the second straight day, but the dip buyers jumped onboard on Monday and we'll have to see if they will let the indices close red today. It is a pre-holiday weekend but so far there are no technical signs of a pre-holiday reversal.

The bulls have been in charge and the reaction to the negative news on Monday, the Moody's downgrade, tells us that the bulls are not messing around. Many money managers are underinvested and they need to buy and that's why dips have been shallow and brief.

There's very little economic data due out this week, but next week gets a little more busy with PCE data, another GDP estimate, and Consumer Sentiment.

 

[tsptalk]

The early catalyst today... For a 4th straight day, the 10-year yield is testing the descending resistance line, and the F-fund (BND) is testing support.

 

[tsptalk]

Pre-holiday reversals are in play. That's when the market reverses the prevalent trend in the days before a long holiday weekend, and typically that trend resumes after the weekend.

Is that what's happening this week? No guarantees, but it looks that way at the movement.

 

[tsptalk]

We have the 10-year Yield down a little today, and the dollar is up, and this has stocks flat to slightly positive but the I-fund lagging.

Home sales came in lower than expected helping those yields dip after yesterday's spike higher into a dangerous territory.

The House did pass the budget and spending bill, which was part of the reason for yields moving up recently, but there's no guarantees it will get through the Senate. The question is, will yields go up again if the Senate does pass it, or is it already now priced in?

We're still in the pre-holiday period, and as I mentioned in today's commentary, seasonality remains a little bearish into the last week of May.

Small caps are flat this morning. Gold and oil are down slightly, and bitcoin is pushing $111K

The Volatility Index is down slightly after rising earlier and filling in an open gap. It remains above its 200-day EMA, however.