Nasdaq Dorsey Wright

- Equity futures are up modestly this morning after being down across the board yesterday. The Nasdaq led the way to the downside, falling 78 bps while the S&P 500 was down 45 bps.
- Crude oil was up more than 4% yesterday and gave a third consecutive buy signal when it broke a double top at $105. Crude is now trading in heavily overbought territory with a weekly OBOS reading approaching 95%.
- Yesterday’s research focused on a divergence in indicators—participation indicators like the Ten Week for the S&P 500 ([^TWNYSE]) and the NYSE High Low Index ([^NYSEHILO]) have fallen to the 20s and 30s. Meanwhile, the Core Percentile Rank remains at 99%, meaning that the S&P 500 group is out scoring 99% of the groups in the Asset Class Group Scores. Such divergences have sometimes preceded S&P 500 corrections.
- The US Treasury 10-year Yield Index ([TNX]) has crossed hit 5% for the first time since 2007 as inflation concerns have driven expectations for rate increases, putting upward pressure on the long end of the yield curve.
- The Fed will wrap up its September meeting today and announce its rate decision this afternoon. The market is pricing in a better than 90% chance that the Fed will increase the federal funds rate by 25 bps at this meeting. And a better than 75% chance of at least one more rate hike by the end of the year.
- The Fed will release an updated statement of economic projections which may have a significant impact on rate expectations.