A Monumental Back-Test in Stocks as Yields Breakout? | Morning Express 4/11/22
Posted: April 11, 2022, 8:44 a.m.
10-year yield broke out & 10-year futures broke down from 2007 trend line.
S&P daily, a close below **** support opens the door for monumental back-test.
S&P 30 minute, ceiling held through Friday with head & shoulders.
Crude Oil May daily with trend line break and failed back-test.
-Do not miss our Top Three Things to Watch this Week, out every Sunday!
- U.S. CPI data tomorrow is in focus to start the week.
- U.S. 10-year yield broke out above resistance on Thursday, high of 2.748% today. Futures broke down last Tuesday. A pivotal multi-year trend line from 2007 we have been highlighting for weeks. (chart above)
- 2-year and 10-year yield curve bottomed out on Monday and has been steepening since.
- Risk-off lifting long-end of curve as 30-year yields hit highest since May 2018 and prices lowest since December 2018.
- Fed speak in focus today. Atlanta Fed President Bostic and Fed Governor Bowman both at 8:30 am CT. NY Fed President Williams speaks at 11:00 am CT. Chicago Fed President Evans at 11:40 am CT.
- U.S. Treasury auctions $46 billion 3-years today and $34 billion 10-years tomorrow.
- Inflation data from China hotter than expected last night; PPI 8.3% versus 7.9% expected. CPI more contained at 1.5% YoY versus 1.2% and flat MoM versus -0.1% expected.
- Chinese Premiere Li said this morning downward pressure on economy increasing.
- Expectations mount for Russian offensive on eastern Ukraine.
- French President Macron leading, but in tight run-off with populist right-wing Le Pen.
E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4483.50, down 12.75 on Friday and 55.75 on the week
NQ, yesterday’s close: Settled at 14,327.00, down 209.00 on Friday and 536.75 on the week
- Rally attempts through Friday failed and built a near-term head and shoulders in the S&P (chart above)
- Similar ceiling developed in the NQ.
- Third major test into what was rare major four-star support at 4439.50-4447.50, now reduced to three-star.
- NQ closed below rare major four-star resistance; this is now detailed as major three-star resistance.
- Bears in the driver’s seat with continued price action below our Pivot and point of balance, aligning with our momentum indicators, in both the S&P and NQ at 4472.75-4479 and 14,325
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NQ (March)
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Crude Oil (May)
Yesterday’s close: Settled at 98.36, up 2.23 on Friday and down 1.01 on the week
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Gold (June) / Silver (May)
Gold, yesterday’s close: Settled at 1945.6, up 7.8 on Friday and 21.9 on the week
Silver, yesterday’s close: Settled at 24.823, up 0.088 on Friday and up 0.169 on the week
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Silver (May)
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