Groundhog Day on a Constant Loop

The recurring theme of the Nasdaq and, indeed, senior indices for a few years now has been the constant snapback rallies after any and all temporary bouts of weakness. Earlier this year we did see a correction which bottomed in early-April for another V-shaped bottom.

Since then, even the slightest weakness has been immediately gobbled up for what seems like one-day wonders of a rare selloff on a perpertual "Groundhog Day" loop. Case in point: The S&P 500 Index still has not precisely tested its 50-day simple moving average (an intermediate-term reference point) since April 30th, which puts it in the top two longest streaks in the last thirty-five years on Wall Street. Indeed, we are not dealing with a run of the mill melt-up at this point. 

History tells us this streak will end and end violently at that, particularly with the White House hell-bent on seeing equities avoid any type of drawdown whatsoever, an offshoot of Murphy's Law, if you will. 

But even with President Trump doing his best to push stocks higher today after last evening's series of GOP defeats in various elections, the QQQ ETF (for the Nasdaq Top 100 stocks) on the 30-minute chart, below, shows a lower high may still be in play dating back to last week's short-term top. Recall that any intermediate and long-term top, by definition, must begin at some point with a valid short-term top. 

Recent earnings for the big tech and growth/AI leaders have been mixed, with PLTR still unwinding from Monday's earnings and Robinhood scheduled for this evening. 

The other big issue of the day is rates on the 10-Year Note surging higher. Clearly, this is not an outcome that The Fed and President want to see. With 4% holding as firm support in recent weeks, especially in the face of a recent Fed rate cut, I still expect another surprise move higher on the long end of the curve which should upset the apple cart of the best laid plains to continue to pump equities and the (upper crust) economy.