Search

10s Eye 1%, S&P Futures Steady After GA Runoff - Morning Market Squeeze

Key Tactical Takeaways: > After Dems captured one seat in the Georgia runoff elections, investors are now waiting on the outcome of another race. If we can make it through this uncertainty, with SPX not closing < ..., bulls could see smooth sailing for a while.

> ... is of epic importance for USO. If USO can start to look comfortable above this level, it could be smooth sailing to ... in the weeks ahead. The new trailing stop for this report's USO long position is now ....

> Because of the possible auction and inflation-related implications we discussed regarding a Blue Wave in GA in yesterday's note, long-end Treasuries are selling off hard this morning. ...% to ...% is in play for today's 10-Yr action.

> Our new ... long had a big day yesterday. We alerted premium Twitter members to take tactical profits at 17.80 yesterday, but we'll maintain a core long against 14.86. We took a small, quick loss on our NOC position.

Some Quick Thoughts: So far, S&P 500 futures are down just slightly as Democrats appear to have a good chance at being victorious in GA. If investors can look beyond the corporate tax increases and regulations that would likely result from this position of control, instead applauding the likely increased spending and stimulus that is to come, it could be smooth sailing over the next several months. While the higher lows that the VIX has been putting in place against the S&P 500's higher highs in recent weeks reflects the nervousness heading into this week's GA Senate Runoff, the fact of the matter is that credit spreads are not showing any real concern at this time. Sure, increased volatility is to be expected surrounding an event that could lead to major policy changes going forward. However, this market has gotten to where it is today on the back of monumental market manipulation. Therefore, the prospect of even greater stimulus and spending in the event of a Democratic sweep is enough to respect the fact that the major indices could possibly .... The key, however, is for price to remain above key support levels during this process. Right now, that layer of support at SPX .... With the benchmark 10-Yr yield testing 1.0%, be ready for the narrative that suggests higher rates are going to spook the equity market. In our view, this market needs to see some inflation, and history proves that equities tend to perform well in the early portion of inflationary cycles. Higher rates tend to become more of a concern when there is an acceleration in the rate of change when rates are rising, and we're just not there yet. This is an abridged version of our premium content. If you'd like to have content like this sent to your inbox each morning, please click here to sign up for a risk-free, 2-week trial (no credit card required).


Please follow us on Twitter @xtractanalytics


Home   |  About  |   Products & Services   |   Free Trial   |   Subscribers   |   Contact Us

Michael Sacchitello, CMT   |   646-295-4542   |   Info@extractmarketanalytics.com 

Privacy Policy   |   Terms of Service

  • Twitter

© 2020 Extract Analytics LLC. All rights reserved.