The market is only off 3.7% from the all-time high, but the swagger morphed into a brave front, which was erased yesterday. What’s left is ‘fear.’

The Volatility Index (VIX), often called the “fear index,” has gone parabolic. I have to note that any number under 20.0 usually means the market is nonplussed, but the velocity of this move underscores the erosion of confidence and greed.

Tale of Two Markets

It was a tale of two markets. Hope for quiet in the Middle East, strong earnings from Goldman Sachs (GS), and an uproar over the retail sales report provided a spark.

At the Open

At the Close

No Winners

Each sector was down on the session, with Real Estate (XLRE) taking it on the chin the most.

There was a massive downside conviction in volume as 5,730 stocks finished in the red against 1,372 in the green.

Market Breadth	NYSE	NASDAQ
Advancers	453	919
Decliners	2,401	3,329
New Highs	20	35
New Lows	89	335
Up Volume	797.68 million	1.34 billion
Down Volume	3.11 billion	3.54 billion

Breaking Down

Major equity indices are breaking down under their 50-day moving averages. This can happen for a few days, but the inability to climb back over at some point means more downside pressure.

I’m watching the Relative Strength Index (RSI) for oversold signals, but each chart looks more vulnerable for now. Reversals above the 50-day moving average are the first checkbox to a buy signal.

Breaking  50

Mag Seven More Influential

Even as there is talk of a ‘Mag Four’ or a ‘MagTwo.’ the “Mag Seven” continues to gain more significant influence in the S&P 500.

There are no significant hurdles to the 10-year yield reaching 5.0%, but it is still nota foregone conclusion. Be that as it may, such a move isn’t instant death to equities if the double top holds.

Today’s Session

Bank earnings out this morning are putting a little oomph into the market. 

Bank of America (BAC)

• $25.8 billion revenue consensus $25.5 billion
• $0.83 eps consensus $0.77

Morgan Stanley (MS)

• $15,14 billion revenue consensus $14.41 billion
• $2.02 eps consensus $1.66

The biggest earnings mover is United Health Care (UNH), which is also the biggest stock on the DJIA.

The market will start strong, which provides a great test for the recent trend of midday selling that snowballs into the closing bell.

Comments

The RSI on the VIX is over 70. Selling starting to get extreme, perhaps. neil bradie on 4/16/2024 9:51:36 AM

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