MORE IMPROVEMENT

We repeat from Thursday:

“Thinking yields putting in some sort of high today which would mean more than likely, a low for so many of the beaten up, stretched and extended broad market areas. Quite overdue. Bounces wont change their trend but relief back towards some sort of norm. Of course, yields will dictate but for today, feels like hit some sort of ceiling. Can only hope! Not blinking.”

Since, 1 out of 2 as the broad market gets better but yields have not. That said, we think yields are around an area of ceiling because:

OIL prices recently topped and are now looking to break below an important stairstep. If that sticks, we believe the worst of the market…and there is a lot of worst (1200 new yearly lows recently), will continue to improve. The small and mid-caps look to have put in a low and right at the longer term 200 day moving average.

We also make note that the NASDAQ and NDX have broken out to the upside off some of the megacaps and a continued improvement in the semis. Actually quite stunning considering how weak the rest of the market has been. But if yields join in on the oil drop, we expect the advance/declines that have been terrible, the smalls and the mids and the equal weight stuff will continue to get better. We thought we were on this last week and thinking it is now more in gear.

Just know that it is noisy out there. Just know we are dealing with a lot of news-driven variables. Oil prices will spike again if the —- hits the fan again but we feel unlikely as elections move decision making. But just know there is a move afoot for better. As always, not blinking. And next up…earnings season.