Treasuries closed near their highs of the session and based on retracement from the 10-year Treasury YIELD's ($TNX.X) 3.846% retracement from its October lows to December highs, the Dow Industrials (INDU) 7,931 -0.85%, S&P 500 Index (SPX.X) 840 -0.6% and S&P 100 Index (OEX.X) 425 -0.71% are at "relatively" the same level as the benchmark 10-year YIELD.
However, the NASDAQ-100 Index (NDX.X) 1,007 +0.13%, which just turns positive after the bond market closes for trading at 03:00, continues to baffle me, as I (Jeff Bailey) perceive many technology stocks as highly suspect under any type of scenario of economic weakening.
Today's bond market action does have the 10-year YIELD breaking below our upward trend and closing below that trend we've discussed in recent weeks. With stocks not getting whacked markedly lower than they have today, I'm left to wonder if there isn't some type of "bullish" scenario at play that I could only explain by the MARKET anticipating or knowing something about a quick resolution with Iraq.
10-year YIELD Chart - Daily Interval
The bond market's response from today's economic data was bullish for the bond market and had buyers active for a second-straight session in the 10-year bond. I view the break of trend and close below that trend as further alert to equity weakness, but so far, this alert to weakness seems to be more inline with the Dow, SPX and OEX, as if the NASDAQ-100 (NDX.X) is in a world of its own.
Yesterday, we saw a rebound in the major indexes at the 03:00 PM EST mark, which has the bond market closing, and we've seen similar action again today with the Dow Industrials (INDU) 7,931 lifting off its lows of 7,893, which came at 02:55 PM EST.
While yesterday's late afternoon rebound in stocks had the indexes rebounding to their DAILY pivot levels and closing very near those levels, current action has the Dow Industrials (INDU) finding some resistance right at its DAILY S1 level of 7,942. While this may change before session's end, I make note of yesterday's trade and DAILY pivot levels, with today's action. Should the Dow not be able to reclaim its DAILY pivot, then I would leave today's session with a bearish observation, when compared to yesterday's trade.