Was today’s trading session a legitimate rally or a dead cat bounce? There were certainly some notable catalysts supporting its legitimacy: 1) the CDC announcement to lift mask requirements for anyone fully vaccinated; 2) Fed bankers defiantly jawboning for lower interest rates in the face of “transitory inflation” data evident in producer prices; and 3) the ongoing improvement in the US labor market. Does anyone sense a “but” statement forthcoming in this analysis?
SP-500: Bullish reversal is in play and now it needs to overcome resistance @ 3984 to confirm legitimacy. 10-Yr Note Yield: Bullish reversal is indicating a resumption in rising rates. Bitcoin: Selling has ceased and another bullish reversal pattern has formed to establish a higher low on the recent pullback. This translates into continuation of the bullish trend.
Against the backdrop of such a fundamentally weak landscape, market breadth was disturbingly narrow as advancers represented only a third of components in the SP-500 or Nasdaq-100…