Very little changed in the market in terms of the indicators. The only minor change was that small caps were better than large caps for the second day in a row, something that hasn't happened since the first week of April. Can it make it to three in a row?
What was a change was the move in the U.S. dollar. Most surprising was the light chatter on it. That's quite a breakout on a 2-year weekly chart. The Dollar Index has its next target around 99-ish, so I suspect if it's up again on Thursday, it will be close to a short-term high, especially since the Daily Sentiment Index is now at 91.
The other interesting chart is the 10-year and 2-year Treasury yield curve, because it is on the verge of making a four-month high and no one even mentioned it. Remember the hysteria when it was low not long ago? And now? Silence. When I asked someone why he thought no one cared, he said, "Stocks are at all-time highs, they only care when stocks are down." You can't argue with that. That's the complacency I talk about.
The most curious part of all of this? Remember when everyone said how the key to the market was High Yield? As long as HYG -- iShares iBoxx USD High Yield Corporate Bond ETF, an exchange-traded fund to
be long High Yield -- was doing fine, the stock market was fine. There is a minor divergence now with a lower high in HYG. That uptrend line has been strong support for 2019, and will remain so. But I'm watching in case it doesn't hold. The line is around $86.50.
Another thing that caught my eye on Wednesday was the banks. Usually when bonds rally as they did (you see? 2.40% was big resistance on the 5-Year yield) banks usually stink. Yet they held strong on Wednesday.
You might recall, I had drawn in that blue line when the banks were taken to the woodshed a month ago, noting I expected a bounce from there. I am impressed that the Bank Index has held so well this week. Now if only it can find enough friends to get up and over resistance (black line).
Finally, despite the rally in stocks, the Volatility Index continues to hold support at 12. Maybe we could see some volatility in the coming days? Nah, no way. I think they passed a law that says no more volatility in the stock market!