The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Hmmmm.
The bears bounced back today. While the S&P opened up about 20 points, it went negative at 10 AM and leaked value over the rest of the day. By the end, the index lost over a percent on 106% capital flow. Yields climbed across the curve again, 1-6 bips.
Yields are getting the blame for today’s weakness. Why today was the straw that broke the camel’s back is anyone’s guess. Other headlines were uninteresting so in the absence of clear causes, we all kinda sorta say “yields did it!”
Since we don’t feel confident identifying the sources for today’s risk-off move, let’s just blame it on the chart and the technicals.
What have we got here?
We’re not overbought nor oversold.
We’re back below the 50-day.
It looks like bulls and bears are duking it out the big drop on December 18th.
The big trend remains intact.
The short-term trend is nowhere.
We have no compelling takeaways at this point. Long term bulls see the digestion of the last 3 weeks as a great entry point but they aren’t controlling the tape. The market is chopping around, perhaps waiting for nonfarm payrolls data Friday.
Markets are closed Thursday so if investors are going to position ahead of the NFP, they’ll put their capital into motion tomorrow.
See you then.
-Mike
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