In case you didn’t know, yesterday was the bottom for equities in this cycle. That is a controversial comment to make given the 50-day low dynamic, the multiple failed rallies yesterday, the sharp sell off at the end of the day, eight of the last 10 days being lower, and a decline of 6.45% in the SPX since the intraday high on April 2. The quantitative Oversold level yesterday was right on target again at 1329 as the low of the day was 1328.41. Today’s Overbought / Oversold levels are as follows: 1341 / 1321.
There is a healthy amount of skepticism in the capital markets, more than is justified by a YTD return of 5.81% for the SPX. While April and May thwarted the upward move, I expect the SPX will make much of that loss back in the coming month. There is much work to be done on the upside and an eight point gap up in equities is not to be celebrated just yet. The 10 Year Note yielded as low as 1.767% percent yesterday and is higher at 1.80% this morning.