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Tech and Utilities Set To Do Battle - Morning Market Squeeze

Key Tactical Takeaways:

> As SPX continues to rally at the rate of the 1-sigma Confidence band rising from the 08/20 pivot, it is inching deeper into the next Tactical Target Zone of ...ahead of NFP on Friday. With momentum now the most extended it has been since Jan '18, a sustained rally beyond this zone without some degree of mean reversion first occurring should prove to be ...


> Treasuries are under pressure this morning, after Monday's price rebound actually caused the benchmark 10-Yr yield to close below its .... While this is a signal that the path to higher rates is about to ..., the more important near-term trend stays ...against ....


Some Quick Thoughts:

Well, yesterday was the big day when we got to see just how many new sheep would be attracted to the parabolic valuations of both AAPL and TSLA shares. The "cheaper" illusion generated by the respective stock splits was far mare pronounced in shares of TSLA, where shares rocketed by 13% in a nearly 3-sigma 1-day move vs. AAPL's 3.5% rally. Technology sector leadership is a major part of our process when trying to frame a tactical vision of the benchmark S&P 500. While the NASDAQ 100, XLK and QQQ all registered all-time highs on Monday, we're keeping an eye on XLK's leadership vs. the very risk averse utilities sector (XLU), as there are very recent signs that ...


Earlier this morning, Eurostat's flash inflation estimates showed that consumer prices in the euro area fell for the first time in four years in August. The level came in at minus 0.2% year-on-year, with core inflation falling to a record low. Separate reports showed the unemployment rate ticked higher in the common-currency zone in July, while manufacturing PMI data showed factories cut jobs and reduced inventories as industry remained positioned for a slow recovery. While this will all factor into the policy review process that the ECB is currently undergoing in the wake of the US Fed's recent policy change, for now the currency market is showing ...


It is noteworthy that in the wake of this weekend's news of Berkshire Hathaway buying > 5% of each of Japan's leading trading companies, the Nikkei continues to .... The Shanghai Comp. closed +0.44%, leaving it below its bearish near-term stop at ..., while the DAX is +0.60%, below its bearish ST stop, but above its bullish near-term stop.


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