Treasury Auction should not be much of a "Game-changer"

Short-term trends in US Equities remain bullish, but the decline to multi-day lows might allow for a bit more weakness on a 1-2 day basis before Equity indices stabilize and begin to push back to new highs. Precious metals have begun to turn back higher, but the bond yield breakout might also extend for another 1-2 days before finding resistance and reversing course. Meanwhile, the US Dollar made a meaningful break in trend and likely pulls back to new monthly lows.  This should aid Emerging markets as well as Commodities, but the key focus remains on the bond market given the quickness of this Treasury move post-auction. My view is that this minor pullback likely gets to 5809 before finding strong support and should not violate 5700 and/or the uptrend from April without warning of a possible stronger decline.  While various short-term cycles warned of a possible inflection at the 90-day mark of the February peak, other DeMark-related signals did not seem to be in place on either a daily nor weekly basis. I’ll monitor this in the days to come, but for now, it seems like the two-day dip might prove shallow before yet another stab at the all-time highs above SPX-6145.

Overall, the selloff to new multi-day lows warrants paying attention for any evidence of trend break in the days ahead.   While the breadth slowdown last week along with abnormally low Equity Put/Call ratios were a minor concern of a possible pullback, it was right to ignore this until price itself began to pullback to multi-day lows.

At present, the decline in SPX has not broken its uptrend, and likely should find support near 4808, with an area near the open-gap from May 9th into May 12th at 5691.69 proving to be very strong support.

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