• S&P 500 Index (SPX) -2.14%

• Nasdaq Composite (COMP) -2.55%

• Nasdaq-100 (NDX) -2.66%

• Russell 2000 (RUT) -2.13%

• Dow Jones Industrial (DJI) -1.91%

• West Intermediate (WTI) +0.49%

• Bitcoin (BTC) -1.43%

• CBOE Ten Year Treasury Yield (TNX) +1.61%

It was a tough session yesterday that was telegraphed throughout the weekend. The bears flooded every orifice of the media with reasons the summer rally had run its course. That close on Friday more or less sealed the fate.  A great run that was bound to end, and had to be tested if it was ever going to gain credibility. 

Market Breadth was ugly. 

Market Breadth	NYSE	NASDAQ
Advancers	550	1,019
Decliners	2,650	3,544
New Highs	20	42
New Lows	88	195
Up Volume	684.79 million	946.05 million
Down Volume	3.23 billion	3.29 billion

Ironically, looking at the internals after the close, it was surprising there wasn’t more carnage.  Not that this wasn’t a tough day with five-to-one decliner than advancers on the New York Stock Exchange (NYSE), and 6.5 billion in down volume between the NYSE and the NASDAQ Composite against 1.6 billion up volumes.

Volume was anemic – in fact, it was the lowest of the year by far.

 

However, it feels unlikely that the market will find its footing now that “Taps” is playing for the June bounce, but history suggests it is possible.

Heat Map

It’s hard to believe, but Energy (XLE) was the least worst performer. 

Finding green specs require a very keen eye when perusing individual performance in the S&P 500.

Key Charts

The CBOE Market Volatility (VIX) Index spiked 17% to 23.80. I think 25.00 is the key resistance point beyond there, and these big swoons become commonplace as selling will beget selling.

The ten-year bond yield climbed above 3.0% and might be ready to spike higher.

The S&P 500 filled that gap, and it must hold above 4,100 after slamming into the 200-day moving average (red circle) and turning lower.

High dividend payers will come into focus as investors seek a level of comfort. On the other hand, great companies could see their shares come under significant pressure. So, buying that dip and getting paid to wait isn’t a bad idea.

Portfolio Approach

There are no changes in our weightings this morning. The Current Buys list remains suspended.

Today’s Session

Equity futures never put up much of a fight in pre-opening trading as major indices marginally higher before giving up the ghost.

The bear bandwagon brimming at the rim. While that tends to be contrarian initially, its means more sellers than buyers.

I’ve been worried about the dollar which has broken out and will be a pain for equities.  On a side note, the last time it was this low my wife and I went to Paris with empty suitcases.

Retail earnings coming up short but a blockbuster result from Palo Alto Networks (PANW) helping our CrowdStrike (CRWD) position this morning.

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