Market Timing Brief for 08-03-2012: A Further 10 Year Treasury Sell-off Would Energize the Stock Market

Based on the 8-03-2012 Close published Sunday, 8-05-2012

UPDATE INTRADAY 8-8-2012: The SP500 Index is up against the resistance of the top white line show in the chart you can get to via the link down below (SP500Tracker™ link).  It looks like it could turn back, but it’s not a given.  There is room for it to move up a bit more.  Watch the 10 Year Treasury Note pictured in the chart image just below here.  If it can’t keep moving up, it will likely pull back (in yield, which means bonds are rallying) and the stock market will at least ease back a bit.  Much more below…

UPDATE INTRADAY 8-07-2012: Treasuries Cooperate – The 10 year Treasury Note is selling off as the chart shows below.  Note the rise above the aqua resistance line with the downward arrow pointing at it.  This is supportive for a further rally in stocks as discussed below.  (When yields rise, bonds are selling off.  The chart below shows the yield rising.)


Ten Year Note Sell-off Helps Stocks

UPDATE AT CLOSE 8-6-2012: The SP500 Index has broken out once again, but is now up against the trend line formed by the highs from June and July (see chart link below).  The index may simply edge up a few more points over 1-2 days and then pull back to test the lower line of the channel formed by the lows of June and July.  The main indicator for a continued rally that will defy the prior pattern would be continued Euro strength and US dollar weakness with a sell-off in the 10 year Treasury Note (TNX).  And now for this week’s earlier comments…

The rally resumed once it was clear that Spain would be receiving all the free money they need from the European Central Bank.  The VIX volatility index plunged to just above the July low on Friday.  It can still drop to the March 2012 low.  The US dollar (USDX, UUP,EUR/USD) is weakening, but must break 82.34 to change the trend definitively.

The biggest tell on the stock markets will be the 10 year Treasury Note and if it runs up above the yield high of 7-27-2012, stocks will have another leg up.  Here’s the chart:

10 Year Treasury Note (TNX) – The Bonus Chart of the Week:

The reason the 10 year Note is so important is that the world must signal that the fear of the destruction of the Euro has faded away before it will invest elsewhere, specifically in the US stock market.  The US dollar should drop as the 10 year Note.  Other bond markets should begin to sell off as well.  Otherwise, stocks will tip down again.

The SP500 Index is up against the 7-30-2012 high and needs to move over that to trigger the next buy.  This is some of the valuable information I share in this newsletter.  There is no point buying markets that are up against resistance.  Make them prove themselves before committing further money.  Here we are:

The NASDAQ 100 is back in action due to Apple’s better performance over the past week (AAPL).  It is a buy at the moment (QQQ).

Commodities could begin to move again after some consolidation.  Oil has some technical tone now and looks like it’s leaning up.

Housing had been pulling back.  Now it’s rising again (HGX, ITB).  That is a bullish sign for the overall market.  It’s good to have some indices with room to rise to the prior highs.

Copper held the prior June lows (JJC), but needs to pick up strength now.   Gold has regained its footing above the 50 day moving average and can be bought with a stop as mentioned in the MTT below (see newsletter after subscribing w/ link below).  See the chart here:

GLD Gold ETF Chart:

The money printing press is expected to run in Europe with the US as the backup, but if Europe does not follow through on its promises, the markets show their displeasure.

Standard Disclaimer: It’s your money and your decision as to how to invest it.

The above is the text from the 8-05-2012  “Weekly Wall Street Sun and Storm Report™.  To see the rest of the current issue and this week’s ratings of all 35 markets I follow and receive the newsletter every weekend, subscribe here:

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Copyright © 2012  By Wall Street Sun and Storm Report, LLC All rights reserved.

This entry was posted in Euro, gold, gold etf, investment, Market timing, S&P 500 Index, trading, Treasuries, US Dollar Index, volatility index and tagged , , , , , , , , , . Bookmark the permalink.

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