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10-Year Treasury Yield Completes a Death Cross
When this technical pattern completes it implies lower prices.
Jeff Saut    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

"On a stock chart, the Death Cross occurs when the 50-day MA falls below the 200-day MA. As the name implies, a Death Cross is associated with sharp downward price movement and can be used as a sell signal in the belief that a significant downtrend will follow." . . . Stockopedia

The reciprocal of a "Death Cross" is termed a "Golden Cross," where the 50-day moving average rises above the 200-day moving average, which is a bullish signal. This morning, however, we are concerned with the "Death Cross" because that is what has occurred with the 10-year Treasury note. The event was brought to my attention by a professor at the Wharton School yesterday with the tag line, "Do you have an opinion on this theory?" The insight was discussed in an excellent article written by Peak Theories Research's Abigail Doolittle. When studying her chart (below), one can see that in four of the previous crosses by the 50-DMA below the 10-year's 200-DMA, there has been some sort of downside hiccup in the S&P 500 (SPX/1920.21). Whether that proves the case here will play out in the days ahead, but it does foot with many of my other indicators that are counseling for caution on a near-term basis.

Yesterday, it was the "rumor mill" awash on the Street of Dreams as a Polish news service ran a story that Russia was getting ready to invade the Ukraine. Then there were rumors Putin was going to restrict Siberian airspace for Western airlines, lengthening their air routes and raising fuel cost versus their eastern competitors (tip of the hat to Art Cashin for that. Art, I will see on Thursday, please round up the usual suspects). Just as the media searched for a causa proxima driving Monday's rally, all to no avail, they could not really find a reason for yesterday's decline. So, how about this? The "top out" parade, chronicled in these missives, telegraphed the current pullback. To wit, we had the negative price, and then the negative breadth, divergences. That was followed by the solidary dance of the Dow where the generals were advancing (the Dow), while the troops (the RUT) were retreating. Of course all of this came at the 65th month from the March 2009 low that has historically been a tough spot for the equity markets. For whatever the reason, when the SPX traveled below Friday's closing price of 1925.15, "stop loss" orders were triggered taking the SPX down to a new intraday reaction low of 1913.77. From there, stocks strengthened marginally, but still notched another new reaction closing low. Yesterday's action left the NYSE McClellan Oscillator somewhat oversold, but not as oversold as it was last Friday (see chart), suggesting the potential for another rally attempt. Yet, I do not trust it. Manifestly, I am reminded of Quentin Tarantino's "Kill Bill: Vol. 1" movie, in which Uma Thurman (Black Mamba) states, "We have unfinished business!" In the current case, regrettably, I think that "unfinished business" is on the downside, even though we could get another rally attempt here.


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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
10-Year Treasury Yield Completes a Death Cross
When this technical pattern completes it implies lower prices.
Jeff Saut    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

"On a stock chart, the Death Cross occurs when the 50-day MA falls below the 200-day MA. As the name implies, a Death Cross is associated with sharp downward price movement and can be used as a sell signal in the belief that a significant downtrend will follow." . . . Stockopedia

The reciprocal of a "Death Cross" is termed a "Golden Cross," where the 50-day moving average rises above the 200-day moving average, which is a bullish signal. This morning, however, we are concerned with the "Death Cross" because that is what has occurred with the 10-year Treasury note. The event was brought to my attention by a professor at the Wharton School yesterday with the tag line, "Do you have an opinion on this theory?" The insight was discussed in an excellent article written by Peak Theories Research's Abigail Doolittle. When studying her chart (below), one can see that in four of the previous crosses by the 50-DMA below the 10-year's 200-DMA, there has been some sort of downside hiccup in the S&P 500 (SPX/1920.21). Whether that proves the case here will play out in the days ahead, but it does foot with many of my other indicators that are counseling for caution on a near-term basis.

Yesterday, it was the "rumor mill" awash on the Street of Dreams as a Polish news service ran a story that Russia was getting ready to invade the Ukraine. Then there were rumors Putin was going to restrict Siberian airspace for Western airlines, lengthening their air routes and raising fuel cost versus their eastern competitors (tip of the hat to Art Cashin for that. Art, I will see on Thursday, please round up the usual suspects). Just as the media searched for a causa proxima driving Monday's rally, all to no avail, they could not really find a reason for yesterday's decline. So, how about this? The "top out" parade, chronicled in these missives, telegraphed the current pullback. To wit, we had the negative price, and then the negative breadth, divergences. That was followed by the solidary dance of the Dow where the generals were advancing (the Dow), while the troops (the RUT) were retreating. Of course all of this came at the 65th month from the March 2009 low that has historically been a tough spot for the equity markets. For whatever the reason, when the SPX traveled below Friday's closing price of 1925.15, "stop loss" orders were triggered taking the SPX down to a new intraday reaction low of 1913.77. From there, stocks strengthened marginally, but still notched another new reaction closing low. Yesterday's action left the NYSE McClellan Oscillator somewhat oversold, but not as oversold as it was last Friday (see chart), suggesting the potential for another rally attempt. Yet, I do not trust it. Manifestly, I am reminded of Quentin Tarantino's "Kill Bill: Vol. 1" movie, in which Uma Thurman (Black Mamba) states, "We have unfinished business!" In the current case, regrettably, I think that "unfinished business" is on the downside, even though we could get another rally attempt here.


Click to enlarge
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
More From Jeff Saut
10-Year Treasury Yield Completes a Death Cross
When this technical pattern completes it implies lower prices.
Jeff Saut    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

"On a stock chart, the Death Cross occurs when the 50-day MA falls below the 200-day MA. As the name implies, a Death Cross is associated with sharp downward price movement and can be used as a sell signal in the belief that a significant downtrend will follow." . . . Stockopedia

The reciprocal of a "Death Cross" is termed a "Golden Cross," where the 50-day moving average rises above the 200-day moving average, which is a bullish signal. This morning, however, we are concerned with the "Death Cross" because that is what has occurred with the 10-year Treasury note. The event was brought to my attention by a professor at the Wharton School yesterday with the tag line, "Do you have an opinion on this theory?" The insight was discussed in an excellent article written by Peak Theories Research's Abigail Doolittle. When studying her chart (below), one can see that in four of the previous crosses by the 50-DMA below the 10-year's 200-DMA, there has been some sort of downside hiccup in the S&P 500 (SPX/1920.21). Whether that proves the case here will play out in the days ahead, but it does foot with many of my other indicators that are counseling for caution on a near-term basis.

Yesterday, it was the "rumor mill" awash on the Street of Dreams as a Polish news service ran a story that Russia was getting ready to invade the Ukraine. Then there were rumors Putin was going to restrict Siberian airspace for Western airlines, lengthening their air routes and raising fuel cost versus their eastern competitors (tip of the hat to Art Cashin for that. Art, I will see on Thursday, please round up the usual suspects). Just as the media searched for a causa proxima driving Monday's rally, all to no avail, they could not really find a reason for yesterday's decline. So, how about this? The "top out" parade, chronicled in these missives, telegraphed the current pullback. To wit, we had the negative price, and then the negative breadth, divergences. That was followed by the solidary dance of the Dow where the generals were advancing (the Dow), while the troops (the RUT) were retreating. Of course all of this came at the 65th month from the March 2009 low that has historically been a tough spot for the equity markets. For whatever the reason, when the SPX traveled below Friday's closing price of 1925.15, "stop loss" orders were triggered taking the SPX down to a new intraday reaction low of 1913.77. From there, stocks strengthened marginally, but still notched another new reaction closing low. Yesterday's action left the NYSE McClellan Oscillator somewhat oversold, but not as oversold as it was last Friday (see chart), suggesting the potential for another rally attempt. Yet, I do not trust it. Manifestly, I am reminded of Quentin Tarantino's "Kill Bill: Vol. 1" movie, in which Uma Thurman (Black Mamba) states, "We have unfinished business!" In the current case, regrettably, I think that "unfinished business" is on the downside, even though we could get another rally attempt here.


Click to enlarge
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
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