Inside the Markets

Market Trends

S&P 500 Index – The uptrend from the April 19th bottom remains in play. Rolling over and testing key support levels of the March highs. Consolidation pattern with a test to the 30-day MA and bounced… all the activity culminated in new highs. Trading at the 5430 level for the last three days… Broke higher on Monday with above-average volume.

NASDAQ Index – Uptrend from the April 19th bottom. Gapped higher on May 3rd and pushed to new all-time highs with SOXX providing the leadership. Nice test back to the March highs and bounced. Held the up trendline and moved again to new highs following the CPI and PPI data. SOXX again provides the leadership. Monday broke higher on above-average volume.

10-Year Treasury Bond Yield – 4.21% on the close. Yields rose on jobs report data showing better than expected numbers. Following the CPI we are back where we were prior… uncertainty remains the challenge. TLT bounced back to the previous highs. Monday rates popped upside to 4.27% and Tuesday back to 4.21% again volatility from uncertainty.

US Dollar Index – Dollar had trended lower since the April 16 high. The reason was hope and belief of a rate cut on the horizon along with weakening economic data. Following the jobs report it bounced and has moved back to the May highs… holding above the $105 mark for now. Interesting action considering a rate cut by the Fed should push the dollar lower? Watching how this unfolds. Last two the dollar was lower…

Commodities – 1) DBA – Flag pattern moved lower to the 50-day MA and bounced. Broke higher on Wednesday and tested the last three days. 2) GLD – Moved moved lower on a higher dollar? SLV followed suit. Holding near $27. Watching both and the dollar. 3) USO – broke support at the 200-day MA on the OPEC+ announcement. Held support bounced. Cleared $73.26 level on the bottom reversal and cleared $75.05… The uptrend cleared the $77.55 mark and is now at the $78.91 resistance. 4) XME – Broke lower from consolidation and established a two-week downtrend.

Miscellaneous – 1) FXI – Moved to support $26.40 and broke lower. Head & Shoulder pattern? 2) EEM – Tested back to the $41.40 support level and broke higher… entry $42.60. 3) EFA – last five days trending aggressively lower. Ugly move on the chart but bounced Monday? $78.50 entry point if we follow through.

Charts to Watch

Other Charts of Interest: PAAS (topping pattern with the stronger dollar), NFLX (consolidation pattern following bottom reversal, breaks higher), XLE (downside trade in play ERY), SOXX (big break higher following PPI and moved higher) AAPL (tested lower on comments from developers conference… then spiked higher breaking out), UNG (volatility in uptrend rising 4 down days – and a bounce).

SWKS – Solid upside on Monday in a consolidation pattern. Looking for a move above $95. Solid bounce higher offering entry at $95. Spiked higher. At resistance … stop at $102. looking for more upside.

AMZN – Trended lower for four weeks, bounced, now looking for a break above the previous highs at $189. Struggling to find momentum. Tested Tuesday.

DIA – The Dow has been lagging behind the broad indexes. Watching for downside trade opportunity if we break key support at the $377.50 level. Bounced Monday… $388.50 level cleared and looking for some conviction. Stocks moving higher AAPL, INTC, NKE, HON.

Storylines to Watch

The S&P 500 and NASDAQ both closed at new highs. The fixation remains on the interest rate cuts from the Fed with the pressure mounting as other central banks cut… CPI, PPI, and FOMC offered some answers but also created more questions. The speculation remains in place as it relates to future Fed action and the economic picture. Monday’s move higher offered more breadth… a good sign for now. Retail Sales on Tuesday missed not helping matters. Taking what is offered and managing the risk accordingly.

* All charts are courtesy of TC2000

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