- S&P and Nasdaq futures up 0.25-0.35% in Wednesday morning trading. Comes after US equities finished higher on Tuesday with cyclicals and Mag 7 among the standouts while defensives lagged. Treasuries still at risk of upside with rates up small. Dollar index off 0.3%. Gold down 1%. Bitcoin is flat. WTI crude down 1.2%.
- I will post on the next note an update on internals, which are now skewing to the overbought zone after reaching deep oversold levels when we shifted long. There is a lot of FOMO to avoid, while momentum has slowed on some metrics. It is still possible for new Combo sell Countdown 13’s to qualify in a few days. I posted charts with CDX Credit spreads that might be at important levels – where risk could reenter the conversation.
- No big directional drivers in play. Some focus on another batch of upbeat AI headlines surrounding Trump’s Middle East trip, along with dollar weakness. Nothing particularly incremental on trade, though White House hinted another deal could be announced when Trump returns from his overseas trip. Reconciliation bill markup process in the House seems focused on further complications stemming from expected Senate changes to the House bill. While Trump kept pressure on Fed to cut rates following cooler CPI print on Tuesday, market now looking for just over 50 bps of easing this year.
- Nothing on the US economic calendar this morning. However, Fed’s Waller, Jefferson and Daly all scheduled to speak. Thursday brings Empire Manufacturing, Philly Fed manufacturing, retail sales, PPI, industrial production, business inventories and homebuilder sentiment. In addition, Fed Chair Powell speaks on the central bank’s monetary policy framework review. Housing starts/permits, import/export prices and University of Michigan consumer sentiment/inflation expectations cap off the week on Friday.
- TSLA‘s board is exploring a new compensation package for part-time CEO Elon Musk. Apple Partner Hon Hai Tempers Full-Year Sales Outlook. ALC pressured by Q1 miss and reduction in FY guidance, with company flagging softer market conditions and competitive pressures in US implantables. AEO preannounced Q1 sales largely in line with Street though operating income light with company calling out elevated promotional activity and a $75M inventory write-down, while also pulling FY guidance on macro uncertainty.
- Key Upgrades/Downgrades: UnitedHealth Group downgraded to neutral from buy at BofA. Citi upgrades REGN; downgrades ABBV, MRK. Rivian downgraded to hold from buy at Jefferies. Wayfair downgraded to sell from hold at Loop Capital Markets.
market snapshot
premarket trading
US MARKET SENTIMENT
S&P and Nasdaq bullish sentiment are nearly back into the extreme zone >80%
Bond bullish sentiment little changed to lower. See chart below.
Currency bullish sentiment with Bitcoin nearing the extreme zone again while US Dollar sentiment fell back below the 50% midpoint majority level again. See these charts below.
Commodity bullish sentiment saw modest gains
US MARKETS
S&P futures 60-minute tactical time frame continues to grind higher with Sequential on hour bar 6 of 13. Recent 13’s have paused the upside.
S&P futures daily up small with Combo on day 11 of 13 and Sequential on day 4 of 13. RSI is very overbought.
Nasdaq 100 60-minute tactical time frame continues to grind higher. Watch TDST support at 20,827
Nasdaq 100 futures daily up small with Combo on day 10 of 13 and Sequential on day 5 of 13. RSI is very overbought.
Extra charts we’re watching
Both CDX High Yield and Investment Grade Credit Spreads have DeMark buy Countdown 13’s
US Dollar Index daily lower again today after moving to the downward sloping 50 day. Sentiment has improved and also backed off from the 50% midpoint level.
US 10-Year Yield with Sell Setup 9. A pause is due for a few days and then a new upside Sequential can start OR with the Setup 9 under the TDST a deeper move lower is possible. The next few days will give us clarity on these scenarios. Sentiment has been in a range with support at ~40%. A break lower would probably confirm the upside Sequential starting scenario.
Bitcoin Daily continues to consolidate with pending Sequential and Combo Countdowns. Sentiment at 79% is near the extreme zone again.
DeMark Observations – Euro Stoxx 600
