Stocks retreated in Wednesday’s session as the yield on 10-year US Treasuries climbed. Our Composite Indicator, which measures all US stocks making new highs and lows on three time frames, has printed a bearish divergence and is heading for negative territory below the zero line, notes Ian Murphy, founder of Murphy Trading.
The selloff in Uncle Sam’s IOUs is being driven by growing concerns of the mounting debt burden and President Trump’s proposal to add more to the load.
Both of my signals are historically bearish, so I would think twice before opening new long positions – and I would also check stops are in the correct locations.
Longer-term, it’s too early to say how this will play out over the summer. But it’s as good a reason as any to “Sell in May and Go Away,” as old timers advise.
