On Tuesday, the S&P 500 rallied 0.4% and, in the process, recorded a new recovery (since March) high on both a closing and intra-day basis. Breadth was positive by a bit less than 2:1 and the up/down volume ratio was positive by a 4:3 margin. However, the day’s gains were mitigated by the fact that total volume declined to its lowest level since Thanksgiving. The daily Coppock Curve has a bullish bias for 15 of the 24 S&P industry groups.
The big news of course is that the S&P recorded a new ytd high, as did the NASDAQ. However, neither the DJIA nor the NYSE common stock a-d line managed to do the same. Indeed, over 40% of the NYSE stocks are at least 10% below their highs, and more than 20% of the stocks are at least 20% below their previous 2009 peak. So while the trend is up, its corrective structure and lack of broad-based confirmations suggests that we view the recent strength with a jaundiced eye.
Our primary support focus remains on the 1087-1084 area. That range has repelled prior pullbacks on four occasions over the past four weeks and, as a result, a decisive breach of that range would be an important change in behavior.
Since 1087-1084 is still intact. the post-November uptrend continues to receive the benefit of the doubt. Moreover, the backing and filling of recent weeks, coupled with Tuesday’s new high, suggests that the index has completed an Elliott Wave triangle or some other continuation pattern. The day’s high was 1120, so the door is obviously still open for a more serious test of the 1121-1156 range that we have highlighted as a significant resistance area.
10-Year Yields
Meanwhile, 10-year yields closed at 3.744%. Subscribers may recall that, in our recent STR, we indicated that a rally through 3.60% would imply that the uptrend from the November 30 low had taken on an impulsive look and would be part of a larger uptrend. Thus, the potential is for further strength to at least the June-August double top at 3.85%-3.94%. Nearby support is at 3.49%.
No comments:
Post a Comment