Headwinds For The Market Could Turn Around Today
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Welcome to the Rude Awakening!
Hope everyone had a great weekend.
Let’s get into this week’s market action…
Headwinds For The Market
There was a lot of strength going into the market on Friday.
But then two headwinds hit that drove it to the downside.
One was the news of the president’s coronavirus diagnosis. The other was no word of another stimulus package coming out of Congress.
But we may have hit a bottom on Friday because looking at the futures over the weekend, we are looking at a broader market opening to the upside.
Hovering Around the 50day MA
We will see as the day goes on whether we can break above the 50-day moving average.
That would be a bullish indicator.
The same headwinds from Friday will determine the direction of the market today… news on the president’s condition and word of a stimulus package that could be approved this week.
Also, there is an interesting correlation going on…
The VIX is up around 4% today.
This is interesting because usually when the market is trending up, the VIX goes down. This is not the case today. So, we will keep an eye on that volatility as the day goes on.
Looking at TLT
TLT is the iShares trust that tracks the 20-year US Treasury Bond.
As you may know, there is an inverse relationship between bond pricing and bond yields.
When yields drop, bond prices rise.
When yields rise, bond prices drop.
There is an interesting sell signal today for TLT that we can take advantage of for a trade with a high probability of success.
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That’s it for today.
We’ll talk again tomorrow…
Editor, Rude Awakening