3 From The MMP
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Below are the latest 3 From The MMP. The Monday Morning Playbook (MMP) is the flagship publication of Beat the Bench and now includes 2 ETF models, in addition to more charts, analysis, and actionable takeaways.
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Tactical S&P 500 support: 3846, followed by 3764
The short-term levels to watch on SPX this week are well-defined. First resistance is near 3930, which is where the early-March bounce began and is the 38.2% retracement of the rally from the October lows. First support is 3846, which was Friday’s intraday low and almost exactly the 50% retracement of the rally. The most critical level is 3764, which is not only last support before the October lows, but a break in the next two weeks would trigger a bearish signal from the December Low Indicator.
Long bonds rip
4 key points on the chart of TLT (20+ Year Treasury Bond ETF):
TLT gained 3.6% last week, the 5th week since October that it has gained at least 3.5% (there were none during its 45% decline).
TLT didn’t budge early in the week when short-term rates were rising, evidence that this isn’t just about the late-week flight to safety. Long yields have topped.
Above 109.50 is a full breakout for TLT
Maybe the most important story is TLT is trying to break out vs. the S&P 500 (lower panel). Despite the bear market in equities, TLT remained below its 200-DMA relative to SPY. I think we finally push through this time.
New lows increasing across the board
A potentially severe problem and key leading indicator I am watching are new 52-week lows. On Friday, the S&P 500, S&P 600 (small-caps), and Nasdaq all saw the most new lows since October 13, when the S&P 500 bottomed. The S&P 500 is still 8% above those lows, but if we see new lows begin to exceed those October levels, we have to accept the most likely outcome is that we take out the October lows at the index price level.
That’s it for this week, thanks for reading! If you like my work, please consider upgrading to a paid membership and tell your friends about 3 From The MMP.
Scott
Scott Brown, CMT
Founder and Chief Investment Strategist, Beat The Bench LLC
