Market Montage

Two down weeks in a row for the S&P 500  - the worst "streak" since November 2012.   Obviously the near term world changed a week ago Wednesday as the "outside day" on the chart (which coincided with Bernanke testimony) actually meant something rather than being completely dismissed within 2-3 sessions as we have come to expect in QE markets.   The horrid damage in the utilities, REITs, and consumer staples since has helped "uncrowd" those very crowded "yield" trades.   While I believe QE "tapering" is much ado about nothing right now, the market is taking it a lot more serious as shown by these movements.

Late Friday the key 1636 level was …

Been a cold long winter (year) for bears in 2013.  But this is the second week in a row they have "won".  Things have essentially been downhill since the Q&A with Bernanke a week ago Wednesday.   This week we had 3 (maybe 4) gap downs and the only gap up (Wednesday) was sold aggressively.   Next week S&P 1635 will be a very key line in the sand as it was the lows of this week and part of a mini triangle (wedge, whatever your term) forming on the S&P 500.

Emerging markets have been obliterated of late as well…

Another wacky session in Tokyo as the Nikkei fell over 5% – in just 6 sessions this index has fallen from "stratosphere" to its 50 day moving average. Stockcharts.com won't update this until the end of the day but today's move took the index down almost exactly to the 50 day moving average. Today's move was a 700+ point drop

Then after the close, Nikkei futures rallied some 400 points on a news report that …

While the indexes are down materially it is not a -2% type of day which you'd think it was from the breadth measures.  This is the worst day since April 15th, and the second worst of the entire rally from mid November.   This is probably due to a lot of areas that are normally safe havens (which usually rally a bit or at least hang in relatively well on a big down day) getting crushed.  The indexes are not telling the tale.