Minor Bond yield breakout results in SPX selloff to near support

I continue to see the US stock market as being attractive, technically speaking, and do not feel sufficient risk is there to warrant a selloff at this time. While price action has been a bit choppy in the last couple weeks, there remain precious little other evidence with regards to frothy speculation to excessive valuation measures that would warrant a major selloff.  Rallies up to SPX-5350-5400 look likely into mid-April before a consolidation gets underway.  Treasury yields and US Dollar should have limited upside after this bounce, and both look close to rolling over.

Tuesday’s gap down to multi-day lows for SPX on the heels of the breakout in bond yields still failed to do material damage, and as of 4/2’s close looks to be holding the level of trendline support from the uptrend line created by the early January 2024 swing low.

While nine sectors finished down on the session with breadth finishing at around 3/1 negative, SPX managed to show a late day rally that helped to recoup some of the early selling.  Only Discretionary, REITS, Healthcare and Technology finished down more than 1% on the session, while Energy was higher by nearly +0.80%.  However, I view the late day strength as being constructive.

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