INFLATION FEARS PUSH BOND YIELDS HIGHER AND STOCKS LOWER --THE DOW AND S&P 500 TRADE BELOW 200-DAY LINES -- THE NASDAQ 100 MEETS RESISTANCE AT ITS RED LINE

STOCKS FAIL TEST OF MOVING AVERAGE LINES... Thursday's CPI report showed January inflation rising  7.5% on an annual basis which was the highest number in four decades (since 1982).   That higher inflation number raised prospects for a more aggressive Fed starting next month, and pushed stocks sharply lower and bond yields sharply higher.   The 10-Year Treasury yield rose above 2.00% for the first time since the middle of 2019 which coincided with a sharp selloff in stocks.  In addition, the three charts below show this week's rally failure  in stocks taking place at or near some important moving average lines.    Chart 1 shows the Dow Industrials rising briefly above its 50-day moving average before falling back below it on Thursday.   It slipped below its 200-day moving average Friday afternoon following a news report that a Russian invasion of Ukraine may be more imminent.   That report also pushed gold and oil prices higher.

Chart 2 shows the S&P 500 falling short of its 50-day moving average for the second time; and also slipping below its 200-day moving average this afternoon.   There again, that drop on Friday afternoon followed the news report on Ukraine.  A weekly close below that red line would be a negative sign for the market.   The Nasdaq was the first index to fall below its 200-day line in late January; that previous support line is now acting as an overhead resistance barrier.    Chart 3 shows the Nasdaq 100 (QQQ) failing a test of its red line at mid-week (red arrow) before leading the market lower at week's end.   Rising bond yields have weighed more heavily on technology stocks which are one of the market's weakest sectors.   Technology is Friday's weakest sector, while the jump in the price of oil is making energy Friday's biggest sector gainer.