The S&P 500 ($INX) extended its major (long-term) uptrend to a high of 7,599.38 before closing May at 7,580.06, up 5.2% from the month. Theoretical Positions: Investors likely bought back into the Index durning April.
The Dow Jones Industrial Average ($DOWI) looks to have resumed its major uptrend with a new all-time during May. Theoretical Positions: Investors are likely moving money to other sectors.
The Nasdaq ($NASX) extended its major uptrend to a high of 27,094.80 before closing May at 26,972.62, up 8.4% for the month. Theoretical Positions: Investors likely bought back into the Index durning April.
The US 10-year T-note (ZN): I am still not getting a good read on the major trend of the 10-year T-note. After posting what looked to be a bullish breakout during February, the market completed a bearish outside month during March before consolidating during April and extending its selloff during May. If the Treasury sector is starting to build in a rate hike as the next move by the FOMC, as indicated by the uptrend of the US dollar index and Fed fund futures forward curve (see below), the 10-year futures market would be expected to trend down. Theoretical Positions: Investors may have gone short the 10-year near the March close of 111-015 based on that month’s bearish outside range. The 10-year closed May at 110-025.
The Fed Fund Futures Forward Curve shows the market is pricing in a possible rate hike in either late 2026 or early 2027. The December 2026 futures contract closed May at 96.25, putting the expected rate at 3.75, the high end of the existing range between 3.5% and 3.75%. The January 2027 futures contract was priced at 96.23 with the July 2027 contract priced at 96.135, putting the expected rate at 3.685%.
