It was a super strange day for the market, with the CPI reading coming in at 7% y/y in line while the core was hotter. Yields did nothing on the nominal side, with the 10-year falling to 1.74% and the 2-year rising to 91 bps.
It caused the curve to flatten to 83 bps. The 5-yr real yield rose back -1.33% from yesterday’s rate of -1.41%, with breakeven inflation rates dropping to 2.85%. The dollar index also tumbled by 65 bps, while Fed Funds futures were flat across the curve.
The 30-year minus the 5-year is on the verge of a colossal break lower and sitting on support at 55 bps. If that goes, it could be on its way to 40 bps.
S&P 500
The S&P 500 stopped just about where it had to to keep the idea of a diamond pattern alive and stopping at the downtrend. If so, the index should head lower and revert to the lower uptrend around 4590.
Roku
Roku (NASDAQ:ROKU) continues to drop, and there is no reason for it not to drop. The stock failed to recapture the support/resistance area at $193.50. I think the stock is now on its way to $150.
Zoom Video
Zoom Video (NASDAQ:ZM) is still holding support at $175, but I get the feeling that it won’t last for much longer, with the stock heading to $150.
DocuSign
DocuSign (NASDAQ:DOCU) is also resting just above support at $134, and once that goes, there is a good chance it goes all the way to $102.
