Treasuries rallied yesterday, but that was only good for a slight decline in equities. The SPX closed just below the Oversold level of 1353. Today’s Oversold level comes in just one point lower at 1352. Today’s Overbought level is 1373. Equity futures are slightly higher. I noted that equities were a bit overextended last Tuesday and Thursday and the 25+ point retracement in the SPX from last Tuesday is a healthy one at this point. This 1350 level is becoming more of a solid support area as time passes.
The SPX is not quite as oversold as it was several times in June and Treasuries are still bid with the 10 Year Note yielding 1.51%. I’m slightly bullish here, but the risk/reward ratio is only modestly favorable at this point.