Support line drawn is where I expect prices to test, May did put in an intra day new low. Action now BELOW important support of the 200 EMA. Volatility more akin to bear mkt than bull. We are watching to see if we get a 50/200 bear cross, observe 50 day is now in downward slope....chances increasing. 2 year note yields a miserable bear fear laden .75%
Deflationary trends continue, even in the face of historic intervention. Price per production unit has fallen to levels not seen since 1950. PCE deflator in downtrend. Job gains have ground to a halt. Taking $'s out of pockets, some consumer related prices have been on upswing, not supportive to consumer spending.ANything Housing related in nosedive, including rents!
Last qtr GDP keeps coming down, now below yield on 10 yr note at 3%.
The REAL FINAL SALES component came in at anemic 1.4%, normal recovery it would be closer to 3-4%.
These are among and other topics I have touched upon reasons to be cautious on the market, especially after such an historic rise. Even in normal times a giveback was overdue.
Will a normal retrace of a bull rally morph into something else? The charts will tell us
D
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