Chart of the Day – Thursday, May 16, 2024

US 10yr yields bouncing off the key 4.31% zone is driving a small Turnaround Thursday effect across markets:
$DXY now positive after falling this morning
$SPX now negative after rising this morning
$GLD now negative after rising this morning pic.twitter.com/rFR8l4B8Jv

— Matt Weller CFA, CMT (@MWellerFX) May 16, 2024

Today’s Chart of the Day was shared by Matt Weller (@MWellerFX).

• Matt points out that risk assets had a mini reversal today after the 10-year yield found support at 4.3%.

• 4.3% will be a significant test for the 10-year yield and the broader market. It was resistance in Feb/March before breaking out during the inflation scare in April.

• A breakdown would be very bullish for stocks and other risk assets like gold and crypto. On the other hand, a rebound could put pressure on these areas.

The takeaway: The 10-year yield is testing a potential inflection point around 4.3%. A breakdown would be very bullish for risk assets, while a rebound would be bearish