Bit of a weird one last night with DJI finishing a little green (0.12%), SPX down a little (-0.5%) and NDQ selling off (-1.24%)
Add to that VIX flying (14.25%), Oil ripping (5%) and Gold airborne (3.42%).
The last 3 markets mentioned are signalling potentially some danger and volatility in coming sessions.
Looking at SPX over shorter and longer timeframes and the path of least resistance does look to be down.
Doesn't mean it's a lock to dump from here but puts probabilities in favour of the bears, however also shows we may see a range form around here between 4225 and 4356.
There's a significant volume void that hasn't much insto interest on ST timeframes 4292 - 4356 .
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Then if we look at volume over the past 2yrs and we see a similar volume void, capped around the same level but the lower ledge is a little lower and sits around the same level as the 200dMA.
If a decent sell was to come I'd expect support to step in here initially (4220/4225)
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Since VIX had its major sell off in June there's been a fairly consistent volatility crush on Fridays, so to see last nights action going into the weekend you have to question if there's something about to break over the weekend or in upcoming sessions?
VIX did stop just short of resistance around 20 so no need for alarm bells just yet but if that level gets taken out I'd be cautious if looking to get long equities.
A number of banks did report last night and all had some decent earnings beats (not surprising) but trading was far from bullish.
JPM is the considered the bellwether of the bank sector and although finished up 1.5% the trade patterns looked more like a short burn than the first step in a new leg higher.
In fact it closed with a (significant) shooting star candlestick that shows sellers were in control and is now potentially signalling the ST uptrend is now over and bears may be taking the wheel from here.
Bank crisis or not we all know JPM just gets bigger with each smaller bank failure as they either get to pick it up for pennies or there will be a 'flight to safety' to bigger banks. So what was more interesting was the other banks action off the back of reporting.
PNC although beat expectations they have given a pretty bleak outlook for what's to come and after the initial excitement (short burn) off the earnings beat the stock sold off heavily.
The other eye opener was Citi, they also had an earnings beat, also had a short burn and then sold off heavily all they way into close...
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Considering XJO is heavily weighted toward banks it's potentially something to be wary of as I think a few more issues will come out when investors start digging a little deeper into some of the reports from US banks.
Even Jamie Dimon himself said overnight - "this may be the most dangerous time the world has seen in decades"
Considering what we've all just been through in the past few years that's a fairly significant warning...
(20min delay)