Stocks Rally Despite, Higher Rates and Hotter CPI

#Stocks –

#Macro – $NDX, #VOLATILITY, #CPI

Mike’s Reading The Markets Macro Subscription Service on Seeking Alpha

As mentioned yesterday, it seemed pretty clear that stocks were likely to rally today. Given how high the shorter-dated implied volatility levels got yesterday, on the VIX 1-day, that measure crashed back to 11 from around 19 today. That is pretty much what gave stocks the momentum needed at the start of the day, and it just carried out, even with the CPI coming in hotter than expected.

The 10-year rate did jump higher by around 4.16% on the day, and at least at this point, it has managed to bounce off that support level at 4.10%. As long as the 10-year rate remains above that 4.1% level, it seems possible, given the data, that it will head back towards that 4.35% area and potentially higher.

The 10-year rate was also boosted by a lousy 10-year auction, which showed a drop in indirect acceptance to 64.3%, down from 71% last month. Meanwhile, the high yield rate also tailed by about one bps. Tomorrow, we will also get the 30-year auction at 1 PM ET.

In the meantime, the NASDAQ 100 has been basically chopping sideways since mid-February, just 1% higher than its February 12 high. There is nothing to say other than that it seems like volatility has been increasing with these big 1% moves on a regular basis. It is not unusual behavior in a broadening wedge since a rising broadening wedge is a sign of increasing market volatility. It is a nice-looking pattern, with some good symmetry on the inner trend lines, but for now, there appears to be no clear sense of the next trend.

Anyway, that’s all for today.

-Mike

Charts used with the permission of Bloomberg Finance L.P. 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.