As a starter into our trading day, we pointed a worthy catalyst was not there to rocket the market Tuesday afternoon. This morning, a flat overnight/pre-market ES turned sharply down to SPX1348 after the open erasing not only the Tuesday afternoon surge, but all of Tuesdays gains(back to open prices) in less than 20minutes. ..”.. but we are close to levels SP ~1365 zone, where last profit taking began, so you figure some will want to exit here for many reasons if the ‘red flags’ are a concern. By lunch hour, if you forgot how last week’s carnage felt and didn’t take notice of ‘red flags’, today was a cruel or is crude reminder as the commodity complex did a re-do with many underlying linked groups forced the broad market to hang on the 20AM benchmark thread.
Don’t look for a catalyst to today’s market activity, it was as simple as a resumption of the de-risking unwind raid from last week led by the US/Euro cross. Three days of a feeble bounce literally wiped out in one with no trend change in sight. If a silver (pun intended) lining exists, it’s that most equity sectors held up again excluding commodity linked ones. Of course, this can change quite quickly with a technical break and/or ominous headline causing some panic selling to spread out. So far 'panic' selling is not evident in the broader market.
A few pockets to trade on the upside are still available, our focus on retail this week was buoyed by M earning following FOSL and yesterday’s earnings linked addition here, ROVI, which traded $56’s premarket jumped another 5pts early morning for a trade.
All in, cautiousness here from May 4 is continuing.