Stocks finished the day lower, with the S&P 500 falling by almost 40 bps. The declines came in the final hour after a pretty flat day. The S&P 500 again tested the downtrend and failed to break above it. But until it can break 4,450, we have to weigh the risk that the downtrend breaks.
However, given the grind-up in rates, I think it is much more likely that the index breaks 4,450 and heads back to the January lows, if not further.
Rates
As I noted in Monday's midday write-up and podcast—"RTM-Waiting For Midweek"—for members, the outlook for stocks is less favorable, and as long as rates continue to grind higher, it will be difficult for stocks to see gains. Despite nominal rates being relatively quiet yesterday, TIP rates did push a bit higher.
The 5-Yr TIP closed higher by one bps to -93 bps from -94 bps on Friday. The inverted NASDAQ chart below shows that the index has not kept up with the rising real rates recently, and so the NASDAQ probably needs to take another leg lower to catch up to the recent rise in those real rates. In fact, with real yields making new highs, it would imply that the NASDAQ should be making new lows.
Lucid
Lucid Group (NASDAQ:LCID) shares have fallen dramatically, and based on the chart, it looked like it may be about to make another big move lower. It was sitting right on support around 26.80; once that breaks, it is probably heading straight to $24.
Block (Formerly Square)
It looks like Block (NYSE:SQ) moved up just enough last week to get out of overbought conditions so that the stock can now break lower and push to $83.
Exxon
In a write-up yesterday, I noted that Exxon Mobil's (NYSE:XOM) run might be coming to an end, along with oil.
