Yields on the 10-yr have bounced strongly since it reached our reversal target on Monday [see: CIW Dec 1.] Today, TNX tested both the 20- and 50-day moving averages and are probably ready for a breather, if not outright reversal.
The end result should be that SPX closes back above 2055 (but, below the SMA5 at 2065 after setting a record last week) in order to back test the red, dashed TL connecting the Jul 24, Sep 4 and Sep 19 tops.
As we look for signals of the chop that should develop between now and year-end, this is a pretty good one. I wouldn’t be surprised to see a pullback to 22.18 to close the last gap or even 21.80 to tag the bottom of the developing triangle.
If I’m wrong, the SMA100 is just above at 23.93. But, I don’t think equities are ready to break out just yet.