VIX challenged its Intermediate-term resistance at 10.18 but closed beneath it  A close above Long-term resistance at 10.98 may generate a buy signal. A breakout above the Ending Diagonal trendline suggests a complete retracement of the decline from January 2016, and possibly to August 2015.  

(WSJ)  U.S. stocks continue to loll along but a few under-the-radar readings reveal simmering uncertainty about some of the market’s best-performing sector groups.

It’s no secret that 2017 is poised to go down as one of the calmest in history. The S&P 500 is riding its third-longest streak ever without a decline of at least 5%, a level typically associated with a pullback, as we noted in our Morning MoneyBeat newsletter Thursday. 

SPX gives up some of its early gains

SPX made a new all-time high on Monday, but saw most of those gains erode over the rest of the week. The proposed pullback may continue through the year-end.  Should it break Intermediate-term support and the trendline at 2571.93, the decline may continue through January.  

(ZeroHedge)  Earlier this week, as Trump’s tax reform was finally being voted through Congress, we showed that in a surprising market reaction, total asset returns – those combination of S&P and 30Y Treasurys – saw their biggest two-day drop since last December, a shock which led to one of the biggest declines for risk-parity investors in months.

As of this morning we now know the reason for this steep stumble: as BofA Chief Investment Officer Michael Hartnett writes in his latest, and last for 2017, Flow Show report US tax reform passage was greeted by near-record redemptions across key asset classes, with $14.5 billion withdrawn from equities- the largest redemption since Brexit – and a further $3.2bn from bonds, the largest in 52 weeks, and even a modest $0.4bn was pulled from gold funds.

NDX throws over Cycle Top resistance

The NDX did likewise, closing the week above its Cycle Top support/resistance, but with a small loss.  A decline beneath the lower Diagonal trendline at 6200.00 and Intermediate-term support at 6189.56 may produce a sell signal.    

(ZeroHedge)  Do you ever feel like you’re being watched when there’s nobody else around?

Decades ago, if the answer to that question was ‘yes’, doctors might’ve advised you to see what they called a headshrinker. But technological progress has a funny way of turning situations on their head. For example, at the turn of the 20th century, everybody had horses – but only the wealthy had cars.

Today, everybody has a car: but only rich people have horses.

The same principle applies to surveillance: If you don’t believe you’re being spied on constantly, then you should probably have your head examined.

High Yield Bond Index surges higher

The High Yield Bond Index continues to make new highs without a major pullback since May.  A break of the Cycle Top at 189.54 may tell us the rally is over. A sell signal may be generated with a decline beneath the lower Diagonal trendline at 180.00.

FinancialTimes has an article worth reading concerning corporate bonds.

UST declines to the neckline

The 10-year Treasury Note Index made a long-overdue Master Cycle low at a potential Head & Shoulders neckline.  The Cycles Model now suggests a potential rally through mid-January that may be quite strong. Should the rally materialize, the minimum target may be mid-Cycle resistance at 127.23 or higher in a panic situation.  

(CNBC)  U.S. government debt yields rose on Wednesday after the U.S. Senate and House of Representatives passed a sweeping tax bill.

The yield on the benchmark 10-year Treasury note rose to 2.497 percent at 2:50 p.m. ET, while the yield on the 30-year Treasury bond was up at 2.876 percent. Bond yields move inversely to prices.

Earlier, the 10-year yield hit a high of 2.503 percent, its highest level since March 20 when the 10-year yielded as high as 2.513 percent.