5 Words to Describe the Major Indices

5 words to describe the major indices:

BEND BUT DOES NOT BREAK!

Simple as that. Read carefully.

The major indices had another chance to break badly (no meth jokes please) on Wednesday…AND DIDN’T! Not only that, major indices experienced what we call a massive reversal day indicating the big money defended the lows again. As bad as the news is and as bad as the news is interpreted, pay attention to price first and everything else second.

Keep in mind, all this did was help the indices back up into the range-bound nausea we have been telling you about for what now seems forever. Underneath the surface, more deterioration has occurred. But for the major indices, defense! Do not argue with it.

A few underneath the surface notes:

Energy stocks are coming off their lows while energy prices have not. This is decent near-term relative strength in this down and out area. After a gargantuan drop, any bounce is welcome for energy bulls.

We continue to see a turning of the corner on Utilities as rates have come down markedly but overall remain range-bound. Can almost say the same for the Reits.

Financials may have lost some of that leadership quality as many names broke near term support in the past couple of days.

The almighty Apple went right into the 105-110 support area and reversed…helping the market. Remember, Apple very important psychologically to the market.

Suspect there could be some upside testing here but doubt it will be better than “C” move. But when Janet telegraphs no rate hike, anything possible.