The strong rally in US treasury yields continued overnight, with 5-year yield closing up 0.040 at 1.023, back above 1% handle finally. The break of 0.988 high indicates resumption of whole up trend from 0.192. Next target is 61.8% projection of 0.192 to 0.988 from 0.606 at 1.098. For now, we’re not expecting a strong break there, at least for the first attempt.
US stocks tumbled deeply together with the surge in treasury yields. NASDAQ lost -2.83% to close at 14546.68, back below 55 day EMA. For now, while deeper correction cannot be ruled out, we’d look for strong support from 14175.11 resistance turned support to contain downside and bring rebound. However, sustained break of 14175.11, accompanied by a strong break of 1.098 in FVX mentioned above, could indicate that the underlying trend in the stock markets has turned. That would open up the case for NASDAQ to drop further to 13002.52 support and possibly below in the medium term.