It was a third day for the equity bears, with the sp -30pts @ 2061, which was a fractional break of the pre-FOMC low of Mar'18th. There looks to be near term downside to at least 2040.. if that fails.. then 2020/10 zone.. where the 200dma will be lurking next week.
Nasdaq comp' weekly
*with a third day of weakness, the weekly sp' 'rainbow' candle has turned to an outright bearish red. Based on previous cycles, we'll see a lower low (<2061) early next week.. even if tomorrow/Friday see a fairly significant bounce into the 2080/85 zone.
Certainly, I'm surprised that sp'2085 failed to hold.. but with the market failure in late morning, it is was not surprising to see weakness all the way into the close. For once, VIX really confirmed the equity weakness.. although still remains at a relatively subdued level in the 15s.
There is particular weakness in the two leaders - Trans/R2K. The Nasdaq is currently lower by -3.0% this week.. the biggest decline since last October. Underlying MACD (blue bar histogram) is turning negative for all indexes... and it does not bode well for the bull maniacs into end month.
Thursday will see the usual jobs data, and PMI service sector data.
*there are two fed officials on the loose, not least the bears number'2 enemy.. Bullard.. who is speaking in Germany.
It remains notable that we are still very close (around 3%) to recent historic highs. Yet... you sure wouldn't think so by the way many are talking. It remains the case that the mainstream get real twitchy if the indexes are not breaking new historic highs each and every day.
There will no doubt be a lot of bearish chatter this evening... but really, unless the bears can keep on pushing lower, and sustainably trade under the giant sp'2k threshold, this is just the same style of price action that we saw across January.
I would agree that Q1 GDP (due April 29'th) is going to be a disappointment.. although that is bullish... right? After all... bad econ-news means the Fed is less likely to raise rates in June. As for the looming next quarterly earnings, I'm sure they'll come in at least 'reasonable'. Sure, energy sector numbers will be lousy, but then.. most of that is priced in. Indeed, many energy stocks did well today... along with Oil.. despite another 8 million barrel surplus.
At least today wasn't tedious!
Goodnight from London