Some very nasty price action today and some concerning developments when you delve through the action. There certainly feels like some sort of liquidation breaks under the surface today.
The market opened pretty strong, pushing through yesterday’s high of day, then flat-out broke down. Our Lean of “selling the 30 to 40 point rallies” has been tough given that the rallies have been complete rubbish thus far!
In any regard, let’s get a quick look at the S&P 500 and a few open positions, because we need to be careful if there’s about to be a real change in tune here.
S&P 500
This morning we pointed out the contrasting strength in semis with the weakness in banks. KRE and the XLF are pointing to a real issue here in regards to price action.
As it relates to the S&P 500, we opened the week above last week’s high, failed to sustain above that level and are now probing below last week’s lows. That has a bearish engulfing candle in play on the weekly and would set up quite a bearish tone.
The one caveat?