The Lord’s Prayer
Our Father, who art in heaven, hallowed be thy name. Thy Kingdom come, Thy Will be done, on earth as it is in heaven. Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us. And lead us not into temptation, but deliver us from evil. Amen.
7:45 am
Good Morning!
SPX futures consolidated between 6053.00 and 6074.60, a very narrow range. While retail investors have gone all-out to buy the dips and hedge funds have started to return to the market, they are being met with some large institutional sellers that are selling what retail is buying. Institutions are reluctant to show their hand when they sell, but the episodes of dip-buying have provided ample cover. This causes a “truncation” of the rallies where they simply run out of liquidity. Sentiment is still running high. However, the market is approaching the point where retail may run out of cash and leverage, causing the SPX to fall beneath the 50-day Moving Average at 6000.00.
Today is a very busy day, as I am doing a major home renovation. I may return later to provide additional commentary.
2:00pm
TNX ramped above Intermediate support/;resistance at 45.92 this afternoon after the Treasury Auction results in which the 10-year yield registered at 4.625%. The Cycles Model implies yields may continue to rise over the next week in anticipation of $175 billion T-bill auction on the 18th.
ZeroHedge reports, “fter yesterday’s stellar 3Y auction, many were expecting today’s sale of benchmark 10Y paper to also be very solid too, especially after the massive post-CPI concession which sent the 10Y surging by over 10bps. It did not quite work out that way, and when the Treasury sold $39BN in 10Y paper at 1:00pm ET, the auction tailed by 0.9bps, the biggest tail since August, in a sale that left a lot to be desired.”
2:11 pm
The 10-year auction may have put a damper on the bounce off the SPX 50-day Moving average at 6005.90 today. Keep an eye on the SPX as a lot of capital has been channeled into the SPX with poor results over the past several weeks.
2:20 pm
BKX made an extended Master Cycle high last Friday. It has since dropped beneath the upper trendline near 137.00, causing a potential aggressive sell signal. Banks are very sensitive to interest rates, as higher money market rates may “pull” deposits out of passbook savings.