Why I’m Watching The 10-Year Yield
Another methodical and
impressive day in the markets. The move higher continues in quite an
orderly fashion. While HVT was noticeably absent, there were still
opportunities to be had if you simply approached the market from a 5-minute
chart. It served me well during the summer and continues to do so as we start
the last half of the year. Until volatility returns, this is the best way to
stay with a market that trends well intra-day. Yes, the duration of the trades
is longer and there is some backing and filling, however the end result is the
same — profitable trades.
I suspect that unless some curve ball hits the
market or the economic news shows the economy even stronger, we can expect more
of the same type of trading going forward. Adjust accordingly. Some
observations on the overall market:
$SOX looking a bit
extended, KLAC
and QLGC both
lagged the market today…be prepared in case the semis correct a bit after
their strong run. The Banks are still just drifting, with not much of a
discernible trend either way at the moment. The right shoulder of the potential
H&S pattern on the daily never found downside follow-through, yet the upside
never got going either. Gold stocks appear set to consolidate or correct, the
HUI was
repelled at 200 a few days ago and NEM
found resistance and formed a double top at 40.
Expect some backing and filling in the golds. The ten-year yield ($TNX.X)
continues to waver around 4.600, a long-term downtrend resistance line. Keep an
eye on this yield–while probability would indicate a pause or correction at
this level, if it moves through this decisively it could set the stage for
collateral action in stocks, the dollar, and the commodities markets.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
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As always, feel free to send me your comments and questions.