Holding it All Up

My bearish bet on the bond market continues to work well, as I trimmed some more of a TBT long position which I have actually held for most of this year with Members. 

That said, the persistent and seemingly omnipresent bid in equities is out in full force, once again, with stocks flipping green as I write this despite the red-hot inflationary jobs report this morning. 4250 on the S&P 500 Index has been the firm line in the sand where dip-buyers have shown an extreme willingness to defend any moves below it in recent weeks, including today. 

It is still early on in the session, however. So I am looking to see which side is more comfortable holding positions into the weekend, longs or shorts, as we look towards a new earnings season kicking off soon for the rest of the month of October. 

Finally, one important point on the distinction between a catalyst versus an excuse for a given stock to make a move. 

Walmart is down in the 3-4% range today, which is a big move for that stock's size and defensive nature, as a WMT executive reckoned that weight loss drug Ozempic may slow food sales among its customer base. 

As you might imagine, that seems like a stretch.

In reality, WMT has a long-term bearish RSI divergence (quarterly chart, below) to price, and has been a crowded defensive name for a while now. I view this as merely an excuse for a selloff, not a catalyst, with much more downside in the coming quarters.