Todays’ Equity reversal looks important and negative.
It appears that a short-term selloff has begun on the S&P 500 (NYSEARCA: SPY).
Under 2815 is worrisome and UNDER 2789 (a bigger line in the sand) could lead down to 2736 and then 2684 for Sept Futures.
This pullback might not be limited to equities… we could see weakness in the US Dollar and in Treasury yields as well.
Futures have reversed right at our key July 27 date, and should move lower next week into August 5 with a chance of weakness into August 10-12.
The S&P 500 has broken its one month uptrend, and the NASDAQ 100 has breached 7292 and (Technology) looks to be confirming its counter-trend sell signal today.
Market breadth is a bit more than 2/1 negative. Not huge by any stretch, however it’s more negative than any of the positive readings seen earlier in the week.
Treasury yields have started to turn lower. And from 2.95, could pullback to near 2.83 and potentially 2.76, while the US Dollar Index should begin to turn down which should be beneficial to Gold.
I am favoring defensive sectors like Utilities, Staples and Telecom, while avoiding Technology and Financials near-term. Bonds should work well and I expect that the downside in Precious metals should prove minor and these are looking increasingly like a better risk/reward. Some charts to put today’s reversal into perspective and I’ll cover this in more detail in this weekends report, which will be sent out Monday morning early
The S&P 500 has broken its trend as of mid-day-Â UNDER 2815 on a close gives more confidence of a breakdown. UNDER 2789 would allow for the acceleration.
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Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
