Katie Stockton on Market Pullbacks, Bitcoin Trends, and Treasury Yields

Market Technicals and Seasonal Pullbacks

• 💡 Shorting an overbought market is generally not advisable due to a lack of chart resistance and strong positive momentum.
• ⚠️ While broad market shorting has been difficult, breadth has deteriorated slightly in recent weeks, offering some limited shorting opportunities.
• 📈 The VIX is inching above its 50-day moving average, and clearing the 200-day moving average at 19.3 would serve as a risk indicator for the S&P 500.
• 🎯 The 20-day moving average has been a valuable, simple tool for identifying trends since the April low, effectively eliminating short-term noise.
• 📉 A seasonal pullback, typically seen towards the end of September, is anticipated before mid-October and could serve as a healthy reset for the market.

Mega Cap Divergence and AI Names

• 🚀 Mega-cap stocks show divergence, with Microsoft and Nvidia underperforming while Tesla and Alphabet show significant gains, balancing contributions to major indices.
• ⚠️ A loss of support from mega caps like Alphabet could be detrimental to the major indices.
• ⚡ Many AI names appear extremely overextended, with overbought readings reflecting strong momentum.
• 🧩 Intel is highlighted as a counter-trend setup with a confirmed breakout from a prolonged basing phase, suggesting upside potential.

Treasury Yields, Gold, and Bitcoin

• 📊 Gold is grinding higher while Treasury yields are rising, a dynamic that makes sense given long-term yields remain relatively low.
• ⚠️ The US Dollar is finding footing, and both Treasury yields (10-year) and the dollar index are near key support levels.
• 📉 A breakdown in 10-year yields below 4% would target 3.67%, with a further breakdown targeting 3.22%.
• 📈 A breakdown in yields could initially cause pain but ultimately be beneficial for the economy, especially as rate cut cycles begin.
• 💰 Bitcoin is in an uptrend but has experienced violent short-term pullbacks, moving to a bearish short-term bias due to overbought conditions.
• 🎯 Long-term, a bullish stance on Bitcoin is maintained, looking for a better entry point around former resistance at 108 or the 200-day moving average near 103.