Both Bonds & Stocks Stand at Critical Technical Junctures
We spend a decent amount of time each weekend talking about technical analysis. However, this weekend, we do it even more than usual. The reason for this is that the stock market…the bond market…the currency market…and many individual stocks…all stand at crucial junctures on their charts. Therefore, the direction of the next material move in these assets will be critical…and thus we wanted to spend a lot of time discussing them this weekend. Thank you.
Table of Contents:
1) The real reason interest rates will say “higher for longer” is because today’s rates are closer to their natural level.
2) “Higher for longer” for interest rates means “higher for shorter” in terms of valuation levels.
3) The technical condition suddenly looks dicey for the major averages…especially the Russell 2000.
4) The tech ETFs look vulnerable, but we’ll have to see more downside follow-though before any warning flags are raised.
5) Looking at the charts on NVDA, AAPL (vulnerable)…and GOOGL, INTC (quite positive).
6) Treasury yields are still at a CRITICAL juncture, but they’re very close to key resistance levels.
7) The KRE regional bank stock ETF are testing a key support level. (So is the European bank stock index.)
8) The economically sensitive Tranportation sector is strangely underperforming pretty significantly.
9) The divergence between FDX & UPS makes FDX vulnerable to a pullback.
10) Summary of our current stance.