evening wrap, July 31

market vibes

“We are what we pretend to be, so we must be careful what we pretend to be.” Vonnegut’s Mother Night via Goethe’s Faust

The stock markets had one of the most active days in many weeks. All three indexes closed lower on high volume. NDX and S&P futures opened at record highs and traded reluctantly lower early in the session, but selling in the Dow, curiously prevalent yesterday, accelerated today, spilling over into the market as a whole.

Although the S&P and NDX were not sharply lower in absolute terms, the fact that the NDX could behave so poorly following META and MSFT’s stellar reports yesterday belies stiff resistance at these levels. Technically, an outside reversal day, opening at a record high, engulfing the previous day's range on the highest volume since the June expiration, is a declarative statement.

The S&P had a similar day: outside reversal lower, high volume. Another point of interest: there was no headline negative news. Amazon and APPL reported good earnings, but the stocks are unchanged or lower, and the indexes were littered with red.

Dollars are starting to run, gold and metals are shaken, oil is starting to discount the end of the world, and bitcoin is channeling the Nasdaq. A few ideas on the price of patience… in the vibe, and some Clapton when Clapton was Clapton.