We did get a confirmed signal today for a Hindenburg Omen, I was waiting on the McClellan Oscillator to get updated after the close, and low and behold, it went negative fulfilling the last requirement. More on the Omen below.
This has to be the chart of the day, TNX still blasting higher, up 5.24% on the day and pushing yields up to 3.46%. Hey Ben, how is that POMO working out for you, although I am just a simple layman without that degree from Harvard University, it does not take much rocket science to see what really is happening in the Bond market. A simple chart can describe that. See Ben, yields are going up, not holding steady or declining as you promised would happen for a mere $600B of voodoo money which I am sure will come back to bite the average American taxpayer in the butt.
With yields increasing, so are mortgage rates, the 30 year broke above 5% today, closing at 5.01%. Curious how that will help the housing market. That is more then a quarter point in the last week, and close to a full point from the lows last month. At this pace, the 30 year mortgage rate will be closing in on 6% sometime in January.
A boring morning turned into an exciting afternoon after the FED announcements were made. The SPX broke down and moved into the red before bouncing up and closing slightly positive for the day, up 0.09%. Breadth and volume numbers are still flat with no extremes happening there, as they have been for the last few days.
The short-term count is still indecisive, and it is still too early to tell if we are still in a small degree 4th wave with a little more upside, or have started a larger move down in an impulsive wave. And until we can get a decent looking impulsive wave down, the longer-term count is in limbo as well.
The biggest development today was on the Hindenburg Omen, we finally got the number of new 52 week highs and lows to compliance and both have fulfilled their requirements for the Omen. New 52 week lows hit a whooping 119 issues, and the highs came in at 179 issues. As I predicted last Friday, any sell-off would push the lows up above the required 75 issues. What I was not expecting was the small size of the sell-off that was needed to attain the requirement. The SPX closed today only 5.14 points off of its yearly highs to accomplish that feat. That in itself should be very worrisome, the SPX is almost identical in price as it was last week, yet the number of new 52 weeks lows have exploded upwards. Parts of this market are breaking down quickly and if they do not recover, the major indexes will be following soon.
Here is a quick refresher on what the Hindenburg Omen is all about!!!