E Markets Continue To Rally Despite Underlying Fears

 

VIX continues to challenge both Short-term and Intermediate-term resistance before closing beneath them. A rally above Long-term resistance at 12.60 implies that VIX may challenge its Ending Diagonal trendline at 17.50 in the following move.

(FT) Despite calls from investment banks that market tumult is on the horizon, Wall Street traders seemed to be taking it easy this Friday. A measure of expected volatility hit a two-week low, while major stock-market indices meandered modestly higher.

The VIX index, which tracks expected S&P 500 volatility over the next month, slipped as much as 0.5 point to 9.98 per cent, the lowest level in two weeks, and well below the long-term average of about 20.

SPX caught between support and resistance.

SPX appears to be caught between the upper trendline of its larger Ending Diagonal and the lower trendline of the smaller Ending diagonal. A break of the lower Diagonal trendline and Short-term support at 2406.29 may be the star of a decline that completely retraces the rally from the February 2016 low.

(Reuters) U.S. stocks were mostly lower on Friday, dragged lower by healthcare and consumer staples shares.

Health stocks had rallied on Thursday after Senate Republicans unveiled legislation that would replace Obamacare.

However, the bill faced skepticism from the Democrats, who attacked the legislation as a callous giveaway to the rich that would leave millions without coverage.

UnitedHealth was down about 1 percent and was the biggest drag on the Dow. Other major health stocks, including Regeneron and Amgen, were down between 1 percent and 3 percent.

NDX retraces two-thirds of its loss.

 

NDX retraced 67% of its loss from the June 9 decline. The next move to look for is a challenge of the trendline and supports beneath it. A decline beneath the rally trendline and Cycle Top support at 5614.79 may suggest a deeper correction is in order.

(BusinessInsider) Technology stocks suffered from a little anxiety attack in the markets last week.

It didn’t last long and really wasn’t all that serious. (Yet.) It was nothing worse than what everyone called “normal volatility” 10 years ago.

But the lack of concern it generated this time is not bullish. is not bullish.

High Yield Bond Index puts in a secondary high.

The High Yield Bond Index rallied until Tuesday, then tested Intermediate-term support at 166.29 before a small bounce into the weekly close. The sell signal may be reinstated beneath that support level. The Cycles Model suggests weakness may continue.

(SeekingAlpha) High-yield corporate bonds have been a remarkably resilient asset class throughout the post-crisis period. This included emerging from the rising default wave that spread across the asset class in 2015 and 2016. And, while high-yield bonds continue to hover near all-time highs, a renewed threat that first emerged for the category back in the spring is continuing to pick up steam. It remains to be seen how much longer high-yield bonds can resist the pressure.

USB continues higher.