The current rally off the December 2018 low has been lead by tech stocks, and has the Semiconductor ETF approaching another important crossroads. (see chart)
Over the past 4-years, the index has created a series of lower highs, which forms the line (2). The 90-day counter-trend rally now has the Shanghai index testing falling resistance in the chart below at (3).
A closer look at the chart and it appears that 10-year yields are breaking short-term support. This is also occurring as monthly momentum rolls over from lofty levels
If the saying So Goes The Banks, So Goes The Broad Market is true, what message are we receiving when financials have lagged the broad market for over a year?
Junk Bonds and the S&P 500 are both facing key breakout tests at the same time. What each does at these key price points could well determine if the S&P 500 will have the strength to retest last years all-time highs.
