Rising Yields Has S&P Under Pressure

NVDA, TSLA, TLT and Nat Gas are on watch too.

Technical Edge — 

• NYSE Breadth: 45% Upside Volume 

• Advance/Decline: 43% Advance 

• VIX: ~$21

The market continues to slowly trickle lower. Surprisingly, it’s frustrating both sides. 

The bulls are frustrated for obvious reasons: They are looking for a bounce that simply hasn’t materialized, as the S&P is quietly working on its fourth straight weekly decline. 

Many of the bears are frustrated too — surprisingly — because even though the index is decline, it continues to give us “false breakdowns,” where the S&P doesn’t gain much downside momentum. It’s been a series of mild dips dragging us down. 

While I do believe we will go lower overall, at some point, the market will catch too many sellers offside and rip the S&P higher, just to shake out the weak-handed bears. Once that happens, we’ll get an idea of who’s going to take control.

TLT

We highlighted the TLT the other day, but it needs to be talked about again. A decline in bonds could be or is foreshadowing the decline in equities. That’s as Treasury yields continue to rise. 

Remember, when the SPX hit its 52-week low in October, the 10-year yield was at 4.33%. Currently, that figure is at 4.07 and in a “full on breakout.” 

Yesterday the TLT bounced off $100 and held the weekly/monthly down level at $100.28. Today it’s not so lucky, gapping down to about $99. If it can’t regain the aforementioned levels, the mid-$90s are in play. 

S&P 500 — ES