Update: U.S. Stocks/Bonds Resilient Despite Global Sell-Off

We are seeing some encouraging resiliency once again from the S&P 500, with futures up nearly 20 points from overnight lows. Despite the global sell-off, the S&P 500 is quietly rallying on 1) a stabilization in the yen carry unwind; 2)continued technical support from its 50 day-moving average; and 3) a pause in the recent rise of interest rates.

The yen strengthened to the 94 handle earlier this morning, but has since stabilized and moved back to 94.33, helping to quell the unwinding of carry trades/global deleveraging. On the technical front, traders are citing the continued support the 50 day moving average has provided for the S&P 500 since November. Treasuries are rising/yields falling as demand for the relative safety of government debt has resumed following the tepid growth forecasts from the World Bank. The U.S. 10-year yield is back down to 2.20 percent (from the recent high of 2.25 percent earlier this week).

As shown below, the 50 day moving average (green line) has provided incredible support for the current uptrend. With the S&P 500 up 0.4% as of 12:15PM (Dow back above 15,000), we could also be seeing the beginning of a double-bottom form (green arrows), which is often perceived as a technically bullish pattern.

50dma spx

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