Stocks are up slightly after Monday’s big rally, but there’s a big warning sign: The Russell 2000 is not participating.
Not only that, but the bond market (TLT) is going lower after testing the 200-day moving average and sinking. There’s a strong correlation between stocks and the bond market, which means stocks could do the very same thing as the S&P 500 approaches its 200-day MA.
I’m not happy about this at all, though, we are in a congestive pattern.
Tariffs are still the No. 1 driver of everything right now, but there are things going on in the background that we can’t ignore…
Global credit levels are at an all-time high, U.S. consumers are tightening their belts and cutting spending, the Fed lowered its growth projections for 2025, and one Fed governor reduced his rate cut projections from two this year to just one, government layoffs will also reduce employment and spending, and IBM (IBM, a big clue chip, took a beating last week.
So we can’t just blame everything on Donald Trump’s tariffs…
Also for today, we have Consumer Confidence, New Home Sales and Fed Manufacturing coming at 10 a.m. ET — I would not initiate any new positions until after this data. Consumer Confidence has been very bad, so this will be interesting to see.
I’ll cover all that, my daily hitlist of longs and shorts and more in this morning’s “Premarket Must Watch” video!
Roger Scott
Roger Scott Trading
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P.S. Former Nasdaq Market Maker Has This to Say About Alpha Zone Pro
Trading veteran Jack Carter will be joining Roger Scott for an insider session to dive into his new 0DTE platform…
And how it can front-run breakouts before they happen. Set featured image
