The Fuse
What are futures doing
Markets are sharply lower today after the release of the January PCE. The news was not good on the inflation front, all metrics showed higher prices in January than expected. There was a severe break of the 4000 level on the SPX 500 this week, and that is likely where it will finish out today. By and large, the inflation is going to stoke talk of more rate hikes for longer.
European stocks were down early as futures came under severe pressure even before the release of the PCE numbers today.
As we move into another phase of earnings season, some big names continue to trickle out. This week’s report from Palo Alto and NVIDIA show stocks that were tossed aside and went down too far. Next week we have Target, Lowes among others.
The last few days of trading in February, which is turning to be a down month. We’ll see if the bulls can save the day early in the week.
Breadth is on a sell signal now, with very poor breadth for days in a row. Put/calls are now on sell signals as well. Stocks above their 50 ma have come down below 50%, a bearish signal.
Volume levels have been heavy over the last few sessions as distribution is starting to take place. Don’t be the one to try and trick the market, you won’t win.
Support on the SPX 500 is at the 200ma, or 3940. Below there we have 3900 and then 3800.
The Internals
What’s it mean?
This octagon is from midday on Friday, but notice the heavy selling in the vold (top left), and the steep rise in volatility. Protection is being bought. Further, the ADD is trending downward as well, not a good sign for the bulls today.
The Dynamite
Economic Data:
- Friday: PCE for January, oil rig count
Earnings this week:
- Friday:
Fed Watch: Speakers are out in droves trying to convince everyone they will continue with rate hikes until further notice. Eventually the markets will come around and listen carefully.
Stocks to Watch
Boeing
Carvana (poor earnings)
Russell 2K (small caps leading lower)