FOMC, Bonds, Yields, Semiconductors & More!
By Bennett Tindle June 15, 2021
Greetings traders! Bennett here with another market update, coming to you the evening before the June FOMC meeting! There has been a lot of talk about this particular meeting, especially in light of the recent inflation upticks seen in CPI, PPI and PCE reports.
Last we spoke I gave you a buyable support cluster near 4050 in the S&P 500, and we have since made new highs. Price action however has been extremely hesitant these past few weeks, and the market has certainly felt “on hold”, perhaps a product of summer trading. As stocks have rallied, yields have pulled back. We saw the 10yr top back in March at 1.75% as forecast, and its been sideways to lower ever since. Bonds have of course been in an inverse counter-trend correction to the upside, exhibiting remarkable symmetry along the way. So on one hand we have J. Powell and the Federal Reserve assuring us inflation is transitory, simply a product of pent-up demand meeting supply chain constraints caused by the coronavirus pandemic, and on the other…. My bond count. Which prevails?
Chances are tomorrow we see the fed reiterate its 2% inflation target, dismissing the current and move on. But in the unlikely event (currently priced in at 7%) the fed moves, or suggests sooner-than-expected policy changes, watch the bounce in yields and charts we are about to discuss in the update.
We have seen positive signs of rotation back into growth and tech, and many index heavy-weights such as Apple look ripe for an upside breakout if the fed takes another backseat on inflation. Tune in as I take you through the charts, and be sure to join us for our weekly YouTube live events! More details can be found by subscribing to our mailing list at TradingAnalysis.com.