Higher-Than-Anticipated Retail Sales Goose 10-Year Yield

Good Tuesday Morning, MPTraders!  October 17, 2023-- Pre-Market Update: Retail Sales for September +0.7% vs. expectations of +0.3% and August figure of +0.6%, considerably higher than anticipated, which has goosed 10 year YIELD above 4.80% again (see my attached Daily Chart)...  

BAC and GS Earnings came in better-than-expected, but investors exhibit a lukewarm reception so far to the news: BAC is up $0.41 or 1.6%, and GS is up $0.30 or 0.1%. To gain any significant near-term upside traction, BAC needs to climb and sustain above 28.00/30-- last is 27.40, and GS needs to claw its way above 318.70-320.30-- last is 315.40... 

As for the equity futures, they closed strong last evening, bumping up against key resistance in ES at 4415 to 4430 and in NQ at 15,350/60 that if taken out, would have inflicted technical damage to the dominant near-term downtrends and cleared pathways to 4460/65 (in route to 4490-4500) and toward 15,420/465.

But this AM we find both indices have pulled back from their upside breakout zones, and instead remain betwixt and between key resistance and support levels carved out from their respective 10/12 highs and 10/13 lows. For ES, this range is 4430.50 down to 4340.75. In NQ, this range is 15,468.75 down to 15,062.25. 

Bottom Line: Whichever side of the range is taken out and sustained will trigger the next very significant directional move in ES and NQ. At the moment, my nearest-term bias is higher for a retest of Monday's highs at 4414.25 and at 15,336.75-- UNLESS ES first violates 4375 and NQ first violates 15,155 (see my attached charts)... Last in ES is 4384.25... Last in NQ is 15,204.00...

Finally, Every talking head yesterday mentioned the greatly improved breadth and the broad participation of positive stocks across most sectors. In fact, yesterday's Advance-Decline figures were 2110 to 775, for an A/D Ratio of positive 2.72 to 1. That's good, but not like 8 or 9 to 1, which are upside blast-off type A/D ratio figures.

My attached BIG Picture Chart of the Daily Cumulative A-D Line shows a pattern that in my experience is anything BUT bullish. In fact, the current setup is vulnerable to a major breakdown in the A-D line, which is a warning sign that broad participation needs to become the rule rather than the exception in the days directly ahead... 

  • Action-Oriented Trade Set-Ups in Stocks & ETFs
  • Macro Analysis of the Broader Markets
  • Detailed Technical Guidance for each Trading Idea
  • Live Interaction w/ Mike & Our Member Community
  • And Much, Much More!
Join Now! - Special Offer!
Veteran Wall Street analyst and financial author, Mike provides detailed and timely analysis and trade set-ups on a range of markets. Read more...

Have Mike's “Out Front” morning analysis delivered FREE to your email inbox twice weekly!