Is there a better back court duo right now more critical to the direction of stock prices? A weaker dollar I think gets a stock market rally going. A bond market not crashing would also help. Is this actual resistance or just lines on a chart? pic.twitter.com/BY5IkwJolZ
— J.C. Parets (@allstarcharts) May 17, 2022
Today’s Chart of the Day was shared by JC Parets (@allstarcharts). The chart shows the US 10-year Treasury yield ($TNX), and the US Dollar Index ($DXY). Interest Rates and the Dollar have been putting pressure on Stocks all year, as they’ve both climbed to multi-year highs. Stocks don’t like it when these assets move rapidly higher. JC points out that they’re both currently testing long-term resistance levels. 3.00-3.25% has been resistance for the 10-year yield since 2013, and $103 has been resistance for the Dollar Index since 2016. It would likely be bullish for Stocks if these two reverse lower, or even just pause here. If they continue higher instead, it would likely put further pressure on Stocks. Either way, these two are about to give us some valuable information, so keep an eye on how they behave at their former highs.