Markets sank Wednesday and for the fourth consecutive day the S&P 500 “outperformed” the Nasdaq. The Nasdaq lost 1.1% and closed beneath its 50 day SMA and has lost ground 4 of the last 5 sessions. The last 3 of those were accompanied by large volume and finished in the lower half of their daily ranges. Classic bearish hallmarks when markets go out on their lows. I was a bit concerned when the futures were down a decent amount premarket, as bears want to see markets open higher and go out hard on their lows. That may show just how weak this market is, as the internals have been weakening since the first day of the year. As January comes to a close soon, the Nasdaq is down almost 2%, compared to last years 4% gain in the first month of the year. It is looking for a second consecutive weekly loss potentially with a big job number Friday looming. Looking further on its weekly one can see how uncommon back to back weekly losses are. In fact to locate a 3 week losing streak, one would have to venture back to the 6 week losing streak that occurred between the weeks ending 10/12/12-11/16/12. Worrisome overall is the action in the financials that until recently were seen as leading. How quickly that has changed as names like GS C MS are all in correction mode (GS down 9.5% from 52 week high). Other prominent groups that are fading are aerospace. Look what happened with BA today after this mornings earnings release. It dropped more than 5% on the second largest daily volume in a year, only one surpassing it was 7/12/13 when one of their Dreamliners caught fire in London. That put BA just past the correction threshold of 10%. Are the benchmarks ready for their own 10% correction soon?
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