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Lock in sale →The S&P 500 finished the day lower by about 65 bps and closed below its 10-day exponential moving average. It is not a deal-breaker for the bulls, but it is notable, given that this level acted as strong resistance in May and solid support in April. One day does not make a trend, but another day or two below the moving average could.
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Rates rose again today, with the 30-year Treasury yield easily closing at its highest level since 2007. One thing that stands out is that the yield is now trading above its upper Bollinger Band, while the RSI has climbed above 70. That suggests rates are becoming overextended and may be due for either a period of sideways consolidation or a pullback toward the 20-day moving average near 5%.
That said, rates have been trading closely with oil, so if oil continues higher, it will be difficult for yields not to keep rising as well, even in an overbought condition.
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As of now, at least on a closing basis, it appears that oil has broken out of a symmetrical triangle/diamond pattern. The distance from the top to the bottom of the pattern measures roughly $30 per barrel, and when that range is projected from the breakout point, it suggests WTI could climb toward $130.
Mike
Glossary by ChatGPT
- Bollinger Band — A technical analysis indicator that measures volatility using bands plotted above and below a moving average.
- Exponential Moving Average (EMA) — A moving average that gives greater weight to recent price data to identify short-term trends.
- Overbought Condition — A market state where prices or yields have risen rapidly and may be vulnerable to consolidation or reversal.
- Relative Strength Index (RSI) — A momentum oscillator that measures the speed and magnitude of price movements on a scale from 0 to 100.
- Symmetrical Triangle — A chart pattern formed by converging trendlines that often signals a potential breakout in either direction.
- Treasury Yield — The annual return investors earn from holding U.S. government debt securities.
- WTI — West Texas Intermediate crude oil, a major benchmark used for U.S. oil pricing.
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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