Market check: S&P 500 breaks above 3,900 level, bond volatility crashes

Yahoo Finance’s Jared Blikre breaks down the moves in the stock market, bond market, and U.S. dollar on Monday morning.

Video Transcript

- Let's get on over to Jared Blikre, who is standing by at the YFi Interactive. Jared.

JARED BLIKRE: Yes. Only the Dow able to capitalize on the positive momentum from last week. Let's just take a look at the NASDAQ over the trailing five days. Go back to last Monday's close. And you can see that big CPI report reaction right there in the middle. Still up 6% over that time frame.

Now, I want to take a look at the S&P 500 over a longer term. This is three months. And you can see 3,900 here, a very big level. And we're able to break above it. 4,100, 4,200. Those are going to be the next big targets. I've put a year to date chart on real quickly. And you can see how the resistance would stack up there. Is the low in? Too early to say.

But I want to point out a couple of things. Here is the MOVE index. This tracks bond volatility. And you can see it had a huge down day on Friday. This is as of the last week close. And this is the year to date chart. So bond volatility, that is crashing. And that's a good thing because that has been hampering equities. And you can see that big down move right here.

Also, the five year T-note yield just kind of back tracing some of that big down move from last Thursday. The bond market was closed Friday. So digesting a little bit there. Let me show you the US dollar because that had taken a huge dive as well. Now, a lot of the risk on commentary is predicated on a declining dollar. But we've seen that foiled many times in the past this year. So suffice to say that this down move is bigger than anything we've seen this year so far. So we'll have to see if it has any kind of legs.

And then before I go, I want to point out some trends I'm seeing in the sector action. So this is today. Health care in the lead. That has been a source of strength recently. Here's the last five days. That includes that outsized movement by CPI that I was just talking about. Tech in the forefront followed by communication services, materials, real estate, consumer discretionary. Mega caps very well represented.

But guess what. Over the last month, other sectors had picked up first. Now, that's materials you see in the lead. That's up 19%. Industrials, energy, financials, real estate, then tech. So, really, the value and the cyclical trade has been in play here. And those are probably the names that you want to start looking at.

Even if the bottom isn't in in the indices, we've seen a lot of stocks that have not made new lows since May, since the market really started-- the bear market really started crashing and the Fed started pricing in all this hawkishness. So in conclusion here, it's a stock picker's market. And we're seeing some inklings here of a lot of sectors. Value cyclical.

- More buyers than sellers. Jared Blikre, thanks so much.