Bond Rally Could Give Relief to Tech Stocks

Our list of relative strength holdings continues to grow

Technical Edge — 

• NYSE Breadth: 67% Upside Volume 

• NASDAQ Breadth: 76.7% Upside Volume 

The market gave bulls what they were looking for yesterday: A daily-up rotation, which allowed the S&P 500 to burst higher. 

This is why we go from level to level. Yesterday’s Game Plan on the S&P was:

“If we can clear the high — 4406 — it will put the ES over the 50-day moving average as well. That puts active resistance via the 10-day in play, followed by the 4440 level. Bigger picture, above the 10-day and 50-day could open the door up to 4490 to 4500.”

Once we got above 4406, which was clear within the first 20 minutes, it opened the door to higher prices. From here, we pocket the win (or trim some and move to a break-even stop-loss) and manage it going forward. 

I still remain cautious even though we’re looking for two-way action. 

Game Plan 

Did bonds bottom? 

I honestly don’t know, but if this group fetches a bid, it should bode well for tech. Keep the TLT and/or ZB contract on your screen. 

S&P 500 — ES

• Feel free to extrapolate this chart to SPY

If the ES can go daily-up over 4467 and stay above this mark, it puts our next target range in play: 4490 to 4500.