Bulls on the Loose Going into Cinco de Mayo

The market had a modest, bullish move this first trading day of May with stocks moving higher. Leadership was in the technology ($QQQ), healthcare ($XLV), and utilities ($XLU) sectors.

I was a little perplexed with the higher move in utilities ($XLU). The reason being that 10-YR Treasury Yield ($TNX) is up sharply over the last two weeks. Typically, Utilities have been negatively correlated to treasury yields the last few months. But now, seem to be challenging against this relationship.

I will watch to see if this continues, raising a red flag.

I did see strength in the Banks ($XLF) on Monday, especially in the Regional Banking sector ($KRE), which gained over 1 percent. Banks are benefiting from a steepening yield curve as long-term rates rise faster than short-term rates.

Have a great trading day!