U.S stock market set for a pullback as bond yield surge

The stock market futures were mostly lower before the market open today. The bearish sentiment was incited by the jump in bond yield which topped 1.546%. It seems the market will turn defensive once again following the bearish situation. Under the current situation, traders might continue to stay defensive for now and wait for further data before next month’s FOMC meeting.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index print a bullish close yesterday but stick between the daily SMA 50 & 100 range. The index has not moved outside of the range yet which means the situation is neutral for now. At the current time, the index futures are lower by more than 130 points which indicates the daily SMA 100 test after the market open.

Will the index close below the averages and continue lower to test the daily SMA 200?

Eaton Corporation (ETN)

ETN share prices are in an obvious bullish trend. The share prices always bounce from the daily SMA 100 and this time it might continue to bounce from it again. Traders could consider long positions from the daily SMA 100 with a stop below daily SMA 200 or below the trendline.