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2 AM ET –  When an index makes higher highs and higher lows, that’s an uptrend, which is what we’ve had since Monday. And Monday’s drop only resulted in a single lower low, relative to the previous uptrend. It’s not yet apparent whether a lower high has been set. So I guess, we’re in limbo from that slightly longer perspective.  But in terms of the 5 day cycle, the direction is still up, despite the overnight weakness this morning.

To signal a downturn in the 5 day cycle we’d need to see a drop that breaks the trend channel now around 3690.

There’s no 5 day cycle projection yet. A 2-3 day cycle projection of 3740 hasn’t been reached yet. There’s an apparent downtrend line now at 3727 heading for 3720 as of the NY open at 9:30. They’d need to clear that to have a shot at hitting the projection.

Failure to break that line would leave the matter unresolved, unless and until they break the uptrend line headed for 3700 at the NY open.

The 10 year yield broke out this morning. It’s now at 1.01 decisively breakng the high of 0.97. It might not stick, but it confirms that the uptrend that began in August and has seen the yield more than double, remains in force. It also completes a lovely saucer base.

I’m working on a Liquidity Trader update. I wanted to post yesterday but glad I wasn’t able. Now I can address this. It’s at least interesting that the Fed hasn’t been able to suppress the relentless rise in yields since the summer despite $200 billion a month in QE.

Join me during the day for intraday observations and a little fun. 

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