A Quiet Day with much of the world off on May Day holidays…
Stagflation concerns dominate – construction spending and ISM Manufacturing tumbled as PMI/ISM Prices Paid soared to seven year highs – Simply put, hope is gone…
A very mixed picture in equity-land today as Nasdaq ended higher (ahead of AAPL earnings), S&P unch (thanks to the machines) and The Dow suffered (as trade fears hit Boeing and MCD earnings didn’t help)…
Futures show the divergence most clearly…
Small Caps and Nasdaq outperformed in cash markets, Dow worst…
NOTE – the crazy meltup in the last few minutes of the day… which lifted the S&P green
Some big technical levels hit or approached today…
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Gold breaks below 200DMA
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USD Index breaks above 200DMA
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EURUSD breaks below 200DMA
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GBPUSD nears 200DMA
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USDJPY nears 200DMA
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Dow nears 200DMA (23726.82)
But Facebook’s Dating App saved the world… It appeared that Facebook announcing a dating feature may have crushed Match but it ignited momentum across the entire US equity market…
And then the machines went into vertical buying-panic mode…
The Big Banks tried to stage an afternoon comeback but failed…
But Small Banks continue to outperform Small Caps… this won’t end well…
Treasury yields were up across the curve but only modestly…
But the yield curve flattened once again…
The Dollar Index spiked again today, busting through its 200DMA… (Dollar at highest since 1/10/18)
As the dollar gained, so cryptocurrencies lost ground…
And the dollar gains impacted commodities aggressively…
WTI Crude slumped to a $66 handle ahead of tonight’s API data…
With Gold tumbling to the lows of the year…
Gold found support at its 200DMA…
Bonus Chart: This is the chart that every bond bear is banking on… The Fed has unwound $100 billion of its balance sheet and 10Y Yields have risen from 2% to 3%… simply put, The Fed is finally managing to tighten financial conditions.
How long before stocks realize? And how long before this correlation (which is not causation remember) breaks?
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