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S&P Nears Next Hurdle As Subtle Risk Aversion Arises - Morning Market Squeeze

Key Tactical Takeaways:

> SPX is nearing important resistance at ... While momentum is now the most extended it has been since Jan '18, a sustained rally beyond this level without some degree of mean reversion first occurring should not be easy. Luckily, downside protection is very well defined at ...Pending two straight settlements below this level, the prevailing bull trend will go uncontested.


> Even as there was very subtle improvement in risk averse sectors late last week, the overall sector rotation picture still shows strong favorability towards riskier sectors. 


> Although the extent of gold's Friday close above the then bearish ST Noise Buffer at $1966.30 was trivial, it does set  the stage for a test of the far more critical bearish NT Trailing Stop at ...


> In the wake of the Fed's policy change and the big news regarding Prime Minister Abe (all late last week), USDJPY price action has been very volatile. In the end, though, staying below ... leaves risk leaning toward ...


> As we enter this busy week of NFP-capped data, ...temporarily caps what we believe will be an eventual rise to ... by the 10-Yr yield.  Even if this week proves to be turbulent, and buyers force the yield below ..., the NT trend will continue to lean toward...against the NT Trailing Stop of .... 


Some Quick Thoughts:


On this last trading day of August, the Dow Jones Industrial Average, which has yet to completely fill the 02/21 - 02/24 COVID gap at 28,992.40, is on pace for its best August finish since 1984. This comes as the price-weighted index is about to undergo its first change since April '19, with CRM, AMGN and HON about to replace XOM (Wow!), PFE and RTX. As we discuss on page 11, the ...


Subscribers to our Weekend Macro Press got a glimpse into the reflation trade that has been taking shape in recent months. At the heart of this trade remains the recent backup in longer-dated US rates. With the 30-Yr triggering our CTA trend following model last week...


It is noteworthy that while the news of Berkshire Hathaway buying > 5% of each of Japan's leading trading companies did thwart the selling of last week's Abe-related news, the Nikkei's +1.12% gain overnight failed to ...


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