Tuesday's US action put SPX 2925 back on the map and that's pretty much where we left off in the cash session. SPX moved up by +1.50% to close at 2926.32 but still below its 50 day average. NDX outperformed in a bit way closing up +2.2% and over its own 50 day average. Note that the shorter averages are still pointing up and shorts might remain cautious.
NYSE A-D lines closed up at +1312 and NYSE breadth at +2.79:1. NASD breadth closed up at +2.64:1. The rise in market internals strength was gradual from the open with a pronounced increase at the closing bell.
The ES point of control 2928 and there is a bit more structure now to the week, but traders can't think of it as price in a vacuum anymore. A morsel thrown from Dear Leader's window to the waiting throngs of hungry and willing market participants caused another classic looking short covering rally. That scrap was the news that the US will delay some big ticket aspects of the new round of impending tariffs on Chinese goods that are set to start 1 September. This includes some consumer electronics as well as items that affect health and personal safety. This is supposedly the result of public input but we can safely assume the president's advisors were looking the markets as well. They also see SPX 2850 and wondered what would happen if we were drop through 2800 in a sustained way.
The Bond market took a break with yields increasing but the short end of the curve saw the strongest selling action and that caused some more unnerving curve flattenage. Yes that’s not a word. The 2, 3 and 5 year notes gained 9 bps of yield a piece while the 10-year gained 4 bps to yield 1.68% during the cash session. The 30-year big bond only gained 1 bps of yield to leave the cash session at 2.14%.
There are some subtle changes to the weekly support/resistance profile. SPX 2900 is now much heavier support going into week's end and initial resistance has moved a bit lower to 2940. 2950 is still a point of contention if market participants can manage the painted on smiles that please the leader so and keep trade negotiators working hard for greatness
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