with money chasing the largest caps
Oil prices are now under control. This is a very important issue ahead of the US midterm elections.
Copper however remains strong, which indicates that material costs continue to be high and hence inflation expectations could increase.
Below are a few more negative charts:
The Cumulative Ticks and the NHNL tell us that the smallest caps are not participating in the bounce.
Large investors in the QQQ ETF look rather negative here (but this does not reflect on other large ETFs)
For some reason, the Municipal Bonds ETF is being sold here. Not sure what to do of this information.
We can see below that the 10Y rates want to push higher.
Interesting to note that the US$ is in strong accumulation. I would say that this is probably due to Natural Gas issues in Europe which might have to shut down some energy intensive production plants. Hence the move into US$ and also into US equities which look safer compared to European assets.
Interesting to see below that the gap between the Green and the Red horizontal line - Overpriced level - has been narrowing down in the past weeks. This is mostly due to the Q3 expected earnings being in a down trend. Overpriced levels are $4800 or 3.3% on the 10Y rates.
Conclusions:
We can see below that we are sitting at the 200MA, but that there are quite a few resistance levels ahead.
I believe that the 10Y rates will increase back up in the coming weeks, maybe to reach 3% again. Uncertainties linked to the midterm elections will probably push the markets down at some point in September.
Below are the trade ideas for the coming days.