S&P 500 (SPY) Declines As Treasury Yields Rise

Key Insights

  • S&P 500 found itself under pressure as Treasury yields continued to rebound. 
  • Higher yields pushed REITs to new lows. 
  • Energy stocks gained strong upside momentum as WTI oil made an attempt to settle above the resistance at the 50 EMA. 

REITs Remain Under Strong Pressure

S&P 500 is moving lower after an unsuccessful attempt to settle above the 20 EMA near the 3800 level.

Today, traders focused on the Initial Jobless Claims report, which showed that 219,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 203,000.

Tomorrow, traders will take a look at the Non Farm Payrolls report, which is expected to show that the economy added 250,000 jobs in September. This report will likely have a material impact on S&P 500 dynamics.

Meanwhile, Treasury yields moved higher, which was bearish for stocks. The yield of 10-year Treasuries is currently trying to settle above the 3.80% level. In case this attempt is successful, it will move towards the recent highs at 4.00%, which will put more pressure on the stock market.

Energy stocks like Marathon Oil, Occidental Petroleum, and Halliburton continued to move higher today as WTI oil tested the important resistance level at the 50 EMA at $88.40.

Meanwhile, REITs remained under strong pressure. Traders look at higher Treasury yields and sell everything that is related to the REIT segment. Digital Realty Trust, Crown Castle, and American Tower Corporation are testing new lows.

While S&P 500 is down by about 0.5%, today’s pullback is broad as energy stocks are the only group in the positive territory. This is not surprising as Treasury yields have quickly rebounded after the recent pullback, indicating that traders remain worried about aggressive rate hikes from the Fed.

S&P 500 Failed To Settle Above The 20 EMA

S&P 500

From a technical point of view, S&P 500 needs to settle above the 20 EMA to have a chance to continue its rebound. S&P 500 has already made several attempts to settle above the 20 EMA near the 3800 level, but these attempts yielded no results.

If S&P 500 stays below the 20 EMA, it may soon find itself under significant pressure. In this scenario, S&P 500 will likely test the 3700 level.

For a look at all of today’s economic events, check out our economic calendar.

Sector Themes In Play In The Markets For 2022

Years like 2021 saw a solid broad-based performance in many stock market sectors. Relatively simple approaches such as Indexing and Sector Rotation did well. But with macro changes in play and many uncertainties for 2022, we may very well see broad indexes underperforming while individual sectors dominated by a few stocks really shine.

Dips will continue to be bought unless something significant changes. But let’s not forget that we’re long overdue for a substantial correction. Significant risk catalysts are:

  • Fed actions.
  • International conflicts (i.e., Russia and China).
  • Pandemic developments that are not currently known.

There’s always the risk of the unknown – the literal definition of a “Black Swan” event. We shouldn’t get too complacent, knowing that we may need to get defensive to protect capital suddenly. When it’s time to be defensive, let’s not forget that CASH IS A POSITION!

Sector theme DRIVERS FOR 2022

Many uncertainties about Covid and the lingering effects on the economy remain. Inflation has roared back to 30-year highs. Strong employment numbers and consumer spending are fueling significant growth in corporate earnings. We also have a shift in bias at the Fed on interest rates and quantitative easing. These are the “knowns” and are theoretically priced in.

For these reasons and more, we should expect more of a “Stockpicker’s Market” in 2022. Certain sectors will do well and weather corrections better than the broader markets.

Even short-term traders can gain an edge by paying attention to what sectors are strongest. Traders tend to benefit most from playing the strongest stocks in the strongest sectors for bullish trades and choosing the weakest stocks in weaker sectors for bearish trades. That “tailwind” can make a significant difference in results.

Let’s look at some sector themes and individual names to keep an eye on in 2022.


A long-anticipated return to a “normal” economy will continue to be a theme — we just don’t know if that will be Post-Covid or Co-Covid. Or when. Air travel, theme parks, hotels, cruise lines, etc., have all suffered in the persistent Pandemic. What does seem to be changing is the idea of a “new normal” where virus variants may be with us for years to come. We will adjust socially and economically to that for the foreseeable future. DAL, UAL, LUV, AAL are airlines to watch, and the JETS ETF may be a good way to play a general recovery in this sector.


The much-hyped rollout of 5G network technology had its share of setbacks and technology disappointments. But 2022 should see the 5G deployment start to take off as technical issues are worked out, and the promise of widespread coverage with transformational performance becomes real. In the background supplying the 5G infrastructure are AMD, QCOM, ADI, MRVL, AMT, XLNX, and KEYS. Along with infrastructure and testing companies, shares of major carriers T, TMUS, and VZ languished for much of the second half of 2021 and looked poised for recovery in the coming year.


In all its various forms (including autonomous vehicles), AI will remain a developing trend. Big players in the space to watch include MSFT, AMAT, GOOGL, NVDA, AAPL, and QCOM.


Electric Vehicles (EVs) are nearing an inflection point where widespread adoption is poised to take off. Technology and cost competitiveness has improved where some EVs will reach price parity with their traditional internal combustion counterparts.

While there are many smaller players in the EV space, automotive stalwarts F, GM, and TM are investing very heavily. TSLA has been grabbing the headlines, but many others want to stake out their territory in the space, including whole tiers of manufacturers and infrastructure enablers like WKHS, XPEV, NKLA, and CHPT.


Gold, silver, and related miners underperformed for much of 2021 and now look poised for a recovery year as inflation, and monetary concerns grow. GLD, SLV, GDX, GDXJ, SIL, SILJ look good as both longer and mid-term plays. Metals and miners may get hit initially with a significant downturn in stocks but could ultimately demonstrate their safe-haven potential.

Specific to the growth in EVs, battery technology, etc., copper, lithium, and related basic materials should see stronger demand ahead. FCX looks particularly interesting as a dual play on gold and copper. LIT may be a good ETF play on lithium battery technology.


The market for chips is primed for exponential growth. EV’s have about ten times the number of specialty semiconductors as conventional vehicles. AI, crypto, 5G, mobile devices, and ubiquitous computing should drive growth in the semiconductor sector for some time to come.


Real Estate and Homebuilders should continue to do well while employment numbers remain strong and if interest rates don’t rise too quickly. The inventory shortage in most real estate markets will likely persist well into the new year.

Storage REITs like PSA, LSI, and CUBE have been big winners in the Covid economy and still have room to run.


Many sectors still look bullish after gains in 2021. But there are “storm clouds” on the horizon, and we must not take future performance for granted.

Lastly, one of the simplest ways to assess how sectors are measuring up is to watch the charts for the S&P SPDR series sector ETFs and a few others. Here are some notable ones to watch:


These can give us a good starting place to look for leading stocks in winning sectors as the year unfolds.

Let’s remain vigilant for possible market corrections and may the wind be at our backs!

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Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.

If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to check it out, click here: TheTechnicalTraders.com.

Enjoy your day!

Chris Vermeulen
Founder & Chief Market Strategist


Three Stocks to Sell Immediately – Technical Analysis – Wednesday 6/2/2018

Weyerhaeuser Company – WY (NYSE)

Why sell now?

The Weyerhaeuser Stock gapped down 2 days ago and is now approaching critical support around 34.50.

Adding to the evidence are the following numbers, making the sell side look stronger than the buy side:

  1. P/E – 70.43, extremely high
  2. Earnings per share – -20.1%
  3. Cash per share – 0.63, very low
  4. Insiders Transactions – -27.4%
WY Daily Chart
WY Daily Chart









American Tower Corporation – AMT (NYSE)

Why sell now?

The current market American Tower Corporation (AMT) price is 142.04, and reflect the following problematic parameters:

  1. P/E – 53.97
  2. Book per share price – 15.18
  3. Cash per share – 1.84
  4. Debt per Equity – 2.96
  5. Insiders are selling at accelerated pace
AMT Daily Chart
AMT Daily Chart

Worldpay, Inc. – WP (NYSE)

Why sell now?

The uptrend is approaching a breakdown danger zone around $75.00 and there are these numbers to consider:

  1. P/E – 52.35
  2. PEG (Growth) – 3.16
  3. Cash per share – 0.51
  4. Debt per Equity – 8.50, very high ratio
  5. Although EPS are improving, growth numbers do not look bright
WP Daily Chart
WP Daily Chart