Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
GDP revision has just been released and it is quite poor: 2.4% down to 1.8%. Bond yields certainly are not going up due to a great economy.
As for the market – month end markup? Quarter end markup? Deadcat bounce? Or just plain oversold. Whatever the reason we had a large gap up yesterday and a good sized one this morning. Volatility continues to be extreme and large gaps up and down are routine the past 4-5 weeks. Not a stable environment. The S&P 500 is facing the prospects of its first down month in 8 if it does not reclaim 1630 by Friday. 7 up months in a row is rare, and 8 is very rare. Four…count em, four, Fed officials are out to spread the dovish gospel Friday.
For Fibonacci fans here are some retracement levels for this bounce – yesterday took the index to the 23.6% level and this morning’s gap up has it in between that and 38.2% near 1608. That level also works nicely as it was a bottom of a day range on 3 different sessions in June. Above that a whole host of congestion begins.
Treasury yields continue to flirt at the 2.5%+ level so we’ll see if this is the new normal.
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