I was a bit under the weather after hosting my two nephews. Kids + Germs! But I felt compelled to get this out to everyone! Hope you have a great day!
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Show Notes
Summary of the day
As war continues in Israel/Gaza, all it took were a few dovish comments from Fed heads to goose prices. But pay attention to breadth as new lows continues to beat new highs.
The dollar index fell sharply after multiple Fed speakers such as Dallas Fed Lorie Logan and Fed vice chair Philip Jefferson reiterating what SF Fed Mary Daly said on Friday, suggesting that soaring 10Y yields have done the Fed's tightening job for them, and no more hikes are coming.
This is how UBS's trading desk put it:
Fed Vice Chair Philip Jefferson sounds dovish. He said he will remain cognizant of tightening financial conditions through higher bond yields and will keep that in mind when assessing the future path of policy. Also, he said the Fed is in a sensitive period of risk management, where they have to balance the risk of not having tightened enough, against the risk of policy being too restrictive.
I still call BS. Here is what I need to see before I can confidently call a reversal:
* Weaker yields
* Stronger Yen/USD
* Weaker Crude Oil under $80
* 51% of stocks trading above their 50 day moving avg
* More new highs than new lows daily
Breadth
* 78 new highs
* 407 new lows!
* 58% advancing 37% declining
* 80% below 50 day ma
* 68% below 200 day ma
Stuck out
Financials the only sector in red/break even
Strong
* Defense
* Software cyber security
* Magnificent 5 *NVDA and TSLA down
Weak
SMH and Financials red
What to watch
As we approach overhead resistance and the 50 day moving avgs, watch if prices can break up through
Watch mag 7
Watch Crude/Energy
Watch yields
Economic data
https://www.marketwatch.com/economy-politics/calendar
Financial Freedom is not free, but the pursuit is worth the treasure.
