Over the course of the last week, equities continually interacted with the quantitative Overbought levels. Today’s range is still rather wide–1305 to 1333–and while this might suggest that equities are due for a slight sell off, I would suggest that we are in a regime change in which equities have turned a corner from their recent lows of 1291.98 on May 18th. Should the SPX keep its recent progress above 1320, I think that will open up an opportunity for more upside.
10 Year Treasury Notes are yielding 1.675% as of the time of this writing. They’ve cleared the 1.7% figure that I said they would back on the morning of May 14 when they yielded 1.786%. Treasuries are still an anchor holding equities down. These are historic levels for Treasuries; 1.6713% printed this morning and it marks an all-time low yield. This is both a function of fear and realization of the “new normal”.