The S&P 500 fell by 2% yesterday. I was on to something on Monday when I thought things didn’t seem right. The market popped at the opening but collapsed throughout the morning, dropping 3.1% Intraday from the peak. Maybe the weak economic data at 10 AM contributed to the decline; I can’t be sure. But the dollar index was very strong yesterday and appears to have broken out of its recent slumber.
The move higher in the dollar certainly did not come because of the weaker expected consumer sentiment reading. The rally started yesterday morning on euro weakness. It looks like a cup-and-handle technical pattern in the dollar is trying to play out and could send it to around 106.
S&P 500
Finding the pattern in the dollar made me realize there was probably a good chance there was one in the SPY. Of course, the pattern was there, with an inverted cup and handle. The handle broke today. For now, the first level of support for the S&P 500 would come at 3,800 and then down around 3,675.
Apple
Apple (NASDAQ:AAPL) got to the trendline on Monday and failed at it yesterday. Apple needs to hold above $130, which is a significant level. The market will likely make a new low if Apple makes a new low.
AMD
Advanced Micro Devices (NASDAQ:AMD) looks very weak at the moment, with the odds of $73.50 coming into play increasing. With a gap still open, $61 may even be possible.
That’s all for today.