High Noon Standoff Approaching

We are unlikely to see resolution in the bond market before the autumn months, if at all. But the ongoing range for Treasuries continues to merit attention regarding the next directional break we see, as illustrated by the landlocked TLT daily chart, zoomed-out below. 

TLT is indeed a rough proxy for Treasuries, though it does capture the essence of a range and well-defend upside resistance at the $122 area, which turned away bulls over the last few sessions, once again. On the downside, $117 has been holding as significant support, and a breach of that level again could easily ignite a spike in rates as TLT suffers a fresh breakdown. 

But with Fed policy still looking to be more bark than bite, bond bears ought not become too cocky regarding imminent resolution lower. In all likelihood, the FOMC in September is going to be one of the determining factors as to how Fed policy shapes up into the end of 2018. 

For now, the rate-sensitive sectors like banks/insurers/brokers (favoring higher rates and lower TLT) and consumer staples/REITs/utilities/builders (favoring lower rates and higher TLT) are flashing mixed signals and the indecision you would expect with TLT in this range. 

Elsewhere, weakness in tech and the likes of TSLA seem to be weighing on stocks early on. We have a major week of earnings with GOOGL tonight. But the summer doldrums seem to be in full effect which means not over-trading is still a top priority for us.