Good morning traders. Something smells bad about this market. Not necessarily in the short term and not just because of the selloff in broad market futures overnight.
We spent a good amount of time last evening looking for the rotting fish under the hood, but outside of a few lower highs by broad market measures that are duplicating indicey price action, there isn’t anything that stands out at the moment. Let’s move to the chart of the EMini S&P 500 Index Futures (/ES) below.
Maybe the fact that nothing under the hood is pronounced enough to indicate forthcoming bearishness means that it isn’t the market itself that stinks, but something the market is sniffing outside of itself that stinks.
There’s no question the stock market has an inherent sense for unusual negative future events that cannot be anticipated. Perhaps the stock market is sensing some sort of future negative event resulting from the political negotiations in Switzerland or possibly the increase of earnings reductions coming in from U.S. firms?
Whatever it is, we cannot know for sure. What we can do though is continue to closely look for technical tells, such as a move below the ascending trendline in the picture above, that will point us in the right direction to anticipate future market moves. Currently, there isn’t anything bullish about the daily price action of the S&P 500 Index.