Bond Market Responds Bullishly to Surprise Announcement from U.S. Treasury. Stocks Flex Muscles. Plus, a New Momentum Pick.

Now we wait for Friday's employment data.

Stocks are rallying on bullish news from the bond market after the U.S. Treasury announced it is scaling back its debt issuance for “several quarters.” The net effect is that there will be fewer bonds to trade. Thus, the drop in yields.

Image courtesy of Adobe Stock.

Of course, things can quickly change as the January employment data (NFP) is released this Friday. Ahead of the NFP data today’s ADP data showed unexpected strength in hiring in the private sector, while the previously released jobs opening numbers (JOLTS) came in weaker than expected.

Nevertheless, the U.S. Ten Year Treasury has broken below the key 4.5% yield, and its 50-day moving average this morning, which is a bullish development until proven otherwise.

A beneficiary of the decline in rates has been the Real Estate Investment Trust sector (REITs) where we’ve been nibbling at the Weekender Portfolio. This morning I’m adding a new REIT to the our very long term holdings Rainy Day Portfolio.

For its part, the New York Stock Exchange Advance Decline line (NYAD) continues to chug along, mostly ignoring the volatility of the technology sector and possibly heading toward a new high. A new high on NYAD would quash the bearish case for stocks.

The new addition to our Momentum Monday portfolio is a tech stock which is rebounding nicely after the recent rout in the sector.

Thanks to everyone for your ongoing support. I really appreciate it.

Thanks also to all the current Buy Me a Coffee members and supporters. Special shout out to new members who now have access to the Sector Selector ETF Service, included, at no extra charge with your Buy Me a Coffee membership. Two new trades were posted yesterday.

For active trading, short term trading strategies, check out the Smart Money Passport.

For large potential profits with longer term holding periods in stocks check out the Smart Money Passport Weekender Portfolio.

If you’re thinking about day trading, my new book – Day Trading 101

– will get you started along the right path.

Trading is stressful and can drag you down. You can feel better if you take the right supplements. Check out our health page.