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Stocks Up, Volume Up, High Yield Rates Up, U.S. Dollar Up, It’s Cracking

By Michael KramerStock MarketsAug 16, 2022 03:46AM ET
www.investing.com/analysis/stocks-up-volume-up-high-yield-rates-up-us-dollar-up-its-cracking-200628541
Stocks Up, Volume Up, High Yield Rates Up, U.S. Dollar Up, It’s Cracking
By Michael Kramer   |  Aug 16, 2022 03:46AM ET
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US500
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Markets moved a bit higher yesterday, with the S&P 500 closing the gap at 4,300. The RSI is now beyond 72 and is very overbought. With the gap filled, resistance should be strong here.

This has been a momentum-driven rally, but the market dynamics start to change for the balance of this week, with a VIX expiration on Wednesday morning and Fed minutes Wednesday afternoon, and options expiration come Friday. There will be a lot of gamma released this week, meaning that market markers will no longer have to buy S&P 500 futures to hedge their books.

S&P 500 Daily Chart
S&P 500 Daily Chart

Dollar

Additionally, the dollar index had a significant rise yesterday, rallying significantly against the Chinese Yuan. The dollar appears to be heading much higher, with the Chinese economy slowing and the PBOC bank cutting rates yesterday.

USD/CNY Daily Chart
USD/CNY Daily Chart

LQD ETF

Additionally, the LQD corporate bond ETF fell yesterday by roughly seven basis points but, more importantly, has stalled out and stopped rising. This last leg higher in the S&P 500 has not been in agreement with the LQD.

LQD 1-Hour Chart
LQD 1-Hour Chart

TIP ETF

Additionally, the TIP ETF remains stalled out and suggests that the move higher in equity price is not likely to last. It isn’t so much the distance of the spread between the two that matters, but it is the direction that matters, and right now, it is clear they are heading in the opposite directions, and that is where many people will get this wrong.

TIP ETF 1-Hour Chart
TIP ETF 1-Hour Chart

VIX

Also the VIX was up yesterday a little bit, something you don’t often see on an up day in S&P 500. Again, something worth watching over the next day or two.

VIX Daily Chart
VIX Daily Chart

I still think we see 3,950 on the SPX over the next couple of weeks.

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Stocks Up, Volume Up, High Yield Rates Up, U.S. Dollar Up, It’s Cracking
 

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Stocks Up, Volume Up, High Yield Rates Up, U.S. Dollar Up, It’s Cracking

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Comments (6)
Chandru Samtani
Chandru Samtani Aug 17, 2022 12:19AM ET
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Thank you for writing this article
Mario tragik
Mario tragik Aug 16, 2022 9:07AM ET
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Kramer the clwn doesn't give up
The stock Alley
The stock Alley Aug 16, 2022 8:40AM ET
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Bears own this app you guys, dont take what theybsay seriously
The stock Alley
The stock Alley Aug 16, 2022 8:40AM ET
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They say*
Mohd Izhar Muslim
Mohd Izhar Muslim Aug 16, 2022 8:00AM ET
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Thank you for sharing the article 💯
Samer Diab
Samer Diab Aug 16, 2022 7:19AM ET
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I really wonder why noob Michael is given space to write here and on seeking alpha as he is always a bear no matter what the technicals suggest lol
simone scelsa
simone scelsa Aug 16, 2022 7:19AM ET
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Only fools can be bullish in the current environment.
King Agamemnon
King_Agamemnon Aug 16, 2022 7:19AM ET
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166065236675517.jpg
166065236675517.jpg Lots of bears are about to get the poo squeezed out of them when S&P breaks the 200 DMA.
Samer Diab
Samer Diab Aug 16, 2022 7:19AM ET
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lol keep shorting and keep losing money:)
jason xx
jason xx Aug 16, 2022 5:30AM ET
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That will be a nice buying opp
 
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