The bounce occurred mostly on the NQ8 and the growth stocks that had been under pressure lately.
Both the Cumulative Ticks and the TEV patterns on the Future display a trend change.
The weak Money Flow on the defensive sectors tells us the same story.
The issue is still the continuous increase of the 10Y yields .
The problem is that higher rates have made corporate bonds now almost as attractive as equities.
We can indeed see below that the distance between the horizontal Red and Green lines has narrowed down much, which tells us that equities markets are close to becoming as attractive as the more secure corporate bonds.
Equities valuations will become too high from a level of $4150-$4200, which is not far off.
Conclusions:
Upside is very limited here and the risk that the Fed will indicate higher future rates even after September is present.
I would start building short positions this week.
