Craving Fed Pause
S&P 500 was driven lower by a very quick tech reversal that took communications with discretionaries along. That utilities upswing wasn‘t a good sign, and the divergence to staples and financials was stark. No matter how well formerly lagging sectors did, first the low 4,280s and then 4,271 gave.
More overnight downside followed, yet when I‘d see communications with discretionaries starting to hold up, that would be as good an omen of relenting Fed as the rising unemployment claims bets indicate. Let‘s forget now hard macro data of declining same store sales, rising credit card balances, tightening lending standards with fresh Treasuries issuance – and keep focused on still very, very expansive fiscal policy, stock market greed and VIX complacency.
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Let‘s move right into the charts (all courtesy of www.stockcharts.com) – today‘s full scale article contains 4 of them.
The shape of rotations shows that mostly Big Tech suffered yesterday, while Russell 2000 and RSP improvements give some mileage to the argument that poor breadth would catch up and even out. Not so fast, but the case for cautious optimism returning, is here.
As bad HYG selling was, it could have been worse, on higher volume. Still looking for a risk-off day posture in bonds, but it‘ll start improving – the bets on Jun pause are irresistible.
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All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.
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