Both the High Yield (N:HYG) and the Russell Small Cap Index (N:IWM) ETFs have broken down from major multi-month top formations that argue strongly for a similar breakdown in the big-cap (N:SPY), which so far remains above its key breakdown zone 182.50-181.90.
That said, with the heart of earnings season directly ahead, we will soon find out if the SPY companies can withstand any pressure at all from a "profits slump" or profit-margin deterioration.
Judging from the action in HYG and IWM recently, investor tolerance for mediocre or disappointing S&P 500 quarterly results figures to be minimal at best.
