Crude, FXI, Utilities & Treasury yields all getting close to resistance

Short-term US Equity trends look to have turned back higher last Friday following a choppy period of consolidation in recent weeks.   Despite a plethora of bad news domestically and overseas, US Economic data and good earnings have helped markets largely ignore the factors that normally might be expected to ramp up volatility.  Technical structure and breadth have improved markedly in recent weeks, while sentiment is not yet bullish enough to think Stock indices might peak out.   While the back half of October might prove more volatile than the first half, last Friday’s rally looks likely to lead prices back to new highs for S&P and DJIA and could result in NASDAQ challenging its former all-time highs.  Bottom line, Equities remain in great shape, and as discussed yesterday, I expect that Equities bottom into the Rosh Hashanah holiday period and likely rally up into 10/12 this year. 

Over the last few weeks we’ve seen bounces in WTI Crude, US Treasury yields, US Dollar as well as FXI which have all moved quickly higher following intermediate-term declines.

It’s my opinion that all of these rallies should be nearing resistance, making these specific assets/sectors a difficult risk/reward for many who are betting on continued upside. Most should be nearing resistance which should limit their upside progress over the next 1-2 weeks before they turn back lower.

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