TREND NEGATIVE.. but holding up relatively calm ahead of tomorrow's NFP-
Equities have slid back down to yesterday's lows after having tried twice to rally today, and the pullback in German bund yields seemed to have a gravitational pull on US TREASURY YIELDS and in turn equities, while DXY continues to gain ground. SO, of the counter-trend movement mentioned early this am that was susceptible to reversing course, 2 of the 3 assets have indeed moved back lower. TNX and SPX- DXY might have another 1-2 days, but is nearing strong resistance within this downtrend and the metals have been trying to bottom out and rally- Breadth has turned negative in the last hour while volume is flowing at around a 3/2 negative pace into equities- Energy remains the best performing sector along with healthcare, but both have lost some ground in the last hour while Discretionary and Telecom are facing the biggest losses- Overall, increasing signs of grinding near lows after early pullback attempts but it still looks early to get too positive- and Breaks of 2039 should lead to 2027-8 and then 2007-8 which would be an area to buy- Technology looks to be about 2 days away from bottoming given the various Demark based counter-trend indicators flashing exhaustion signals by end of week, so this group will be important, given its 20% weighting in the S&P, the largest sector by composition
Failure to rally on a few occasions has now led S&P back lower to test yesterday's lows- Still difficult to buy here given the negative momentum and downward sloping pattern- A break down to early April levels would make more sense
Bund yields look potentially to get down to 10-11bps or even 7 on a complete retest- For now the next 2-3 days should be lower in yield
DXY has now bounced for 3 days, yet has not really improved its trend on this move and if anything, now lies near areas to sell into this - Overall, still tough to put a lot of conviction in the idea that commodities have peaked and the US Dollar goes straight up- A pullback down to test lows at 92 or slightly under would add to the thinking that the Dollar's momentum overall could be changing for the better, but much more proof is needed, technically speaking.