Today’s session may be the template for the next few days or weeks, as the Street digests the new Fed, Powel 3.0, and hope for Russia to end its campaign of terror.  Meanwhile, the market rally, which began as something of an anecdote to the fear and anguishes that came with the emergence of Covid-19, has shifted. Hype, hope, excitement and seeing its unlimited potential based on a world of the future coming tomorrow has shifted to a market of aloofness, hopeless, and a sense of a permanent rut.

Valuations didn’t matter on the way up, and they don’t matter on the way down, to the chagrin of many, me included.  They will matter soon; although, I’m not sure if we have to get the next set of earnings release to see corporation once again find ways to bolster the bottom line, and in this case, justify higher share prices.

Today’s session is probably closer to how trading will go until mega cap bottoms and earnings give the naysayers comfort.

Cyclicals rock:

• Financials
• Industrials
• Materials

With defensive as a hedge:

• Staples
• Health care
• Utilities

As all of this plays out, the propensity for huge swoons into the close continues to reflect lost belief in the system.  Even charts, which are great to gauge the pulse of real buyers and sellers, hasn’t been effective in finding a bottom.

In many ways, that’s what hasn’t changed – highly charged emotions driving the action.  Except, they have gone from universal euphoria to universal despondency.

As I mentioned this morning, mega cap growth, especially technology, continues to breakdown.  The NASDAQ is nearing a very important support point.  Tech will trade higher alongside higher yields – the idea that the 10-year over 2.0% erases the value proposition of Microsoft (MSFT) or Amazon (AMZN) or so many others is beyond preposterous, but it’s what the crowd is reacting to right now.