On Friday SPX fought for 3350 but quickly gave way to some selling pressure on moderately negative breadth to close at 3319.47. There was no definitive break down below 3300 and depending on how you draw your consolidation zone bracket, we either finished just below or just inside our current range. That leaves us sort of neutral and the bulls waiting to regain footing for another try at SPX 3420. Underlying support is unchanged but will alter a bit early Monday.
NYSE internals were all over the place but moderate in tone with A-D lines dropping from the open to close at -938 and NYSE breadth bouncing from around -4:1 to close at -2.74:1. NYSE TICK distribution was sort of even though cumulative measures were negative. NASD internals were true to the volatility of the index as traders consider some of the perceived discounts on heavily sold mega tech names. NDX advance-decline lines opened near +60 and closed at -63 while NASD breadth closed at -1.35:1. The NYSE auction reveal was about -2B to sell and pared to mildly positive at the bell.
VX futures term-structure regained the slightly upward slope for November, while VIX itself lost a little bit of ground on Friday. That contango situation on top of the elevated CBOE index has been based partly on the upcoming US elections on the 3rd of November, and traders will observe this positioning closely. You could say it represents the paradox created by a mix of cheap money, massive liquidity injections and the fear induced by common sense.
US Treasury yields were up on Friday despite the negative equity close while the DXY is still treading water under its declining 50-day average. This goes well with the skittish tenor of things right now.
