The Great Turn Called

S&P 500 recovered from fearful Friday selloff in the Asian session, and even managed to spike on hot retail sales (no landing) balanced by slower Empire State manufacturing (soft landing – I was however doubting that move.) Expectations of a selloff based on Saturday‘s extensive analysis came to fruition so early during the regular session, and the short calls panned out great for all clients. The success grew more pronounced on the Israeli War Cabinet meeting conclusion, which gave fresh momentum for yields to rise.

 

S&P 500 and Nasdaq Outlook

(Click on image to enlarge)

S&P 500 and Nasdaq

Another lower low, and the trend looks quite set in place – note that daily volume didn‘t reveal enough buying interest. Low 5,160s weren‘t serious to bring up as support, but 5,125 fell instantly. 5,080 is the next objective for the sellers, but I don‘t think they can reach it today. Still, the medium-tern outlook is bearish, and Russell 2000 will lead in this adjustment to rising yields and stubborn inflation.

Today‘s housing data came on the soft landing side clearly, and that‘s constructive for the major indices least susceptible to rising rates (read this in the daily context only).


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