A negative confluence of events is taking shape in the markets today. It's important enough in magnitude that it will likely last into the end of this week, at least.
Here's the list:
- SOX blew off yesterday. While it didn't touch the brick wall of resistance at 1640 discussed yesterday, it did get within 15 points of that mark.
- The wasted energy of the market simply meandering around while the SOX was begging it to come along for a ride into the stratosphere amplifies whatever downside that is to come.
- Yields have decided that it's a good idea to completely disregard whatever correlations the equity market has become cozy with, persistently rising today in the face of a weak equity market. This is not an accommodating signal for equities, in general.
- Facebook is facing a fairly formidable short-term top with its high tick at 208 today. It wouldn't be surprising to see this top sustain for some weeks, at least.
- AMZN and GOOG report tonight. Their earnings will surely be good. Their guidance won't be. All of the targets of pending governmental probes are going to become extremely conservative and modest in the words they choose to describe earnings going forward. Facebook last night was the first example of this.
- The Russell is experiencing a significant expansionary thrust to the downside off of a key trajectory. This is a negative technical development for an index that has been lagging significantly in 2019.
- The S&P is still stuck in the mud at 3000. Not simply because this is a neat round number. Rather, there is an army of resistance from different points in time that converge here. This one is going to take time as discussed ad nauseam here in recent months.
Bottom line: Play it safe. This isn't an area to be touchy-feely with the markets.
