Yields Will Rise Further, Stocks Hold Key Support - Morning Market Squeeze

Key Tactical Takeaways:

> Given the maturity of the S&P's post-07/24 wave structure, as well as the upward rotation of the VVIX, we are entering an area where participants should not be surprised to see intra-day moves that overshoot the usual 1 σ daily Confidence bands. No meaningful breakdown in the benchmark S&P’s bull trend will be signaled until SPX ...

> Despite this morning's Treasury market bid, momentum in the benchmark 10-Yr part of the curve has acquired enough bearish escape velocity for an important test...

> Although Financials have not gotten a boost from the past 3 days of sharply higher yield movement, this sector is still backing-and-filling its way to a test of the June highs. Stay long XLF against ...

> We entered a new short to our trade ideas list at the open yesterday.

Some Quick Thoughts:

One of the great mysteries in this world of zero interest rates is whether or not current S&P 500 valuations are too high. There’s no arguing that by historical standards, current multiple valuations are extreme. In this new TINA (there is no alternative) world, however, professional money managers are faced with...

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