Futures are up sharply on the first day of May – often a dramatic month historically speaking (“sell in May and go away.”) The algos are certainly protecting ES’ SMA50…

continued for members...

It seems like we’re at the moment of truth, where the rally reveals itself to be a bear market bounce or something with more upside. SPX’s chart is more supportive of the bear market bounce path, with a SMA50 tag, .618 tag, and falling white channel .786 line tag at the open. VX and VIX continue to hold horizontal support very well, with RSIs also complying. EURUSD is still backtesting its .618 at 1.1274, suggesting another leg up to 1.1746 (USD weakness) if it can hold… …while USDJPY is arguing otherwise (USD strength.) The net result, at least for now, is that DXY backtested its Sep 2024 lows.
CL and RB are bouncing slightly, but continue to slump – perhaps the industry’s way of supporting Trump. Lower oil/gas prices = lower inflation input = easier for the FOMC to cut rates in the coming months.

And, in fact, the 10Y has reentered the falling red channel after plunging below its SMA200. But, the 2Y is falling just as fast or faster…

…getting very close to its Sep 2024 lows (3.538%)…

…which means the 2s10s is still hanging in there at 57 bps – still a breakout.

BTW, MSFT is soaring on strong earnings and guidance. But, the pop simply took it to the top of a year-old channel and the .786 Fib. So, I definitely wouldn’t chase it from here – not with a 10%+ gap to fill!

Stay tuned…