Stocks Hesitate as Treasury Yields Form Potential Short-term High

Last week, the treasury market anticipated the development of the latest Short-Term Cycle Low (STCL) in stocks when the Alpha Low (AL) of the short-term cycle in the 10-year note yield formed one session before the corresponding low in the S&P 500 index. Today, a similar divergence occurred as yields moved sharply lower, indicating that the latest Short-Term Cycle High (STCH) may have formed yesterday.

Stocks have hesitated during the last two sessions following the extreme reaction earlier in the week and renewed weakness early next week would signal the likely development of the latest Alpha High (AH).

The negative divergence that has developed between treasuries and stocks suggests that the formation of the AH will likely occur sometime during the next few sessions. A stock market reversal at these levels followed by a quick return to the last STCL would favor the bearish short-term scenario that we have been tracking, so it will be important to monitor market behavior closely next week. We will identify the key developments as they occur in our daily market forecasts and signal notifications available to subscribers.

Read more here

More Posts by this author

• 
  A Closer Look at the November Employment Report
• 
  Stocks Hesitate as Treasury Yields Form Potential Short-term High
• 
  Gold Consolidation Formation nears Completion
• 
  Stocks Surge on Central Bank Swap Rate Reductions
• 
  Stock Market Forms Short-term Low
• 
  Stock Market Approaches Important Short-term Low
• 
  Stocks Confirm Short-term Breakdown