Futures are up moderately after bouncing at the 1.618 Fib last week.

continued for members…

The BoJ announced that they may allow the 10Y to rise above 1%, meaning that the yen should be expected to strengthen (USDJPY to decline.) We’ll keep an eye on this, as the yen carry trade still carries some weight in determining equity prices. A drop in USDJPY means a rise in DXY, which is typically bearish for stocks.I’m still looking for further declines in oil and gas, which should take some pressure off the 10Y and allow it to continue backing off. It’s very common to see a bump in equity prices leading into an FOMC decision (Wednesday.) The economic data has been hotter than expected lately. Combined with strong employment data and strong wage increases (including autoworker strike results) there is a chance the Fed will surprise folks with another rate hike.

Even if not, I think the higher for longer argument will likely be repeated/emphasized. Don’t be surprised if today’s bump unwinds. Stocks are still well below their SMA200s, typically a bearish sign in and of itself. And, the chart patterns suggest SPX 3956 is still in the cards.

GLTA