Something Has Changed In The S&P 500
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Some fascinating things have developed in the markets over the past couple of days. The pattern of gapping lower, filling it, and moving higher has decisively changed. In fact, we noted it just a couple of weeks ago. In fact, our discussion was even picked up in a MarketWatch.com story.
The chart below shows we have had successive days, where the S&P 500 has gapped lower but has not been able to refill that gap. The rebound in the index has only taken the S&P 500 back to the level of the initial opening level.
We are seeing the same thing occurring in the technology sector using the XLK has a proxy.
It would suggest to me there are just not enough buyers in the market, presently to lift the index above the opening level. Perhaps the machines have been reprogramed?
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Looking at the discretionary ETF, one that has recently broken out, the difference becomes apparent. The XLY gapped lower, but the buyers came into the market to completely refill it in the morning and take shares above and beyond by the end of the day.
I believe still that S&P 500, and the technology sector is likely to continue to feel pressure, and continue to drift lower over the next couple of weeks, as we have previously noted.
Tesla has it big semi truck event on Thursday night, one that should be interesting. Tesla bulls were able to rally shares yesterday, and despite losses in today’s trading the stock managed to hold support at $310, another positive sign for a bottom getting put in place.
That it for today.
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