Ouch! Yesterday’s session gave me flashbacks to the heavyweight championship on Saturday. After getting hit hard early and looking to be out for the count, major indices turned nicely, led by the NASDAQ Composite.
Once that valiant effort began to fade, it was clear this wasn’t going to end well. And just like former champ Deontay Wilder, the market finished the session sprawled on the canvas.
Overhead Right | S&P 500 | NASDAQ |
Open | 4,385 | 14,540 |
High | 4.415 | 14,665 |
Low | 4,361 | 14,482 |
Closed | 4,360 | 14,486 |
By the closing bell, the S&P 500 Heat Map was mainly red with standouts in Energy, Materials, and Real Estate.
Message of Market
Despite crude closing higher, Energy stocks made a reversal lower, mostly on profit-taking. I did not like how Financials finished the session, giving up a big chunk of gains just days before they step up to the earnings plate.
In Communication Services, Facebook (FB) continued its slide, Google (GOOGL) tripped up, and profit-takers blinked and took some off the table on Netflix (NFLX).
S&P 500 Index | -0.69% | |
Communication Services XLC | -1.51% | |
Consumer Discretionary XLY | -0.41% | |
Consumer Staples XLP | -0.03% | |
Energy XLE | -0.37% | |
Financials XLF | -1.00% | |
Health Care XLV | -0.78% | |
Industrials XLI | -0.80% | |
Materials XLB | +0.01% | |
Real Este XLRE | +0.13% | |
Technology XLK | -0.55% | |
Utilities XLU | -1.36% |
Market Breadth
Volume was anemic, but market breadth was not as bad as one might have assumed. In fact, up volume fractionally edged out the down volume on the NASDAQ, indicating (to me) that certain stocks are being accumulated.
But until there are more new highs than lows on the NASDAQ, the downside bias will remain in place.
Market Breadth | NYSE | NASDAQ |
Advancing | 1,418 | 1,609 |
Declining | 1,825 | 2,750 |
52 Week High | 153 | 102 |
52 Week Low | 54 | 168 |
Up Volume | 1.35B | 1.80B |
Down Volume | 1.90B | 1.71B |
Brutal Close
One characteristic of the market since it began stumbling last month is harsh declines into closing bells. Right now, there is a clear series of lower highs and lows that cannot be reversed until there is a strong upside day that closes at the high of a session; a 1.0%+ move.
Another red flag is from the inability to climb back over the 50-day moving average, which was a staunch and reliable support point serving as a springboard for the buy-on dips crowd.
Portfolio Approach
There are no sector weighting changes this morning.
Today’s Session
Futures have reversed course and are now pointing to a positive open. Oil is pulling back, down .3% to $80.25. The 10-year note is relatively flat at 1.60%.
On the economic front, NFIB Small Biz Optimism index came at 99.1 vs. 99.5 consensus.
Let’s see if this will be a strong upside day that closes at the high of a session and gets the rally started.