Markets were firmly lower Tuesday with the Nasdaq once again taking the brunt of the selling as it finished lower by 1.55% falling beneath its 50 day SMA once again. Biotech was a big reason for the move lower as the IBB which sliced its 50 day SMA last Tuesday tried to recapture that line yesterday but was turned back. Monday as the indexes enjoyed lukewarm gains the ETF closed 5 handles below its intraday highs and met resistance at the round 350 figure too. The fund can have a tendency to precipitate as evidenced by the rapid 7 week losing streak that fell more than 20% between the weeks ending 2/28/14-4/11/14. Former best of breed name CELG is now 17% off recent all time highs made just 6 weeks ago, and perhaps can be viewed as an entry here at its 200 day SMA. This overall group has been doing a bulk of the heavy lifting and we spoke about the internet sector starting to see signs of weakening. The semis were responsible fro holding up the Nasdaq too and they are trembling. Key groups have been showing fatigue and we have been leaning bearish here, but without the technicals confirming there is no reason to act. That may be happening now, but the calls being heard on the markets fragility think there could be another leg up. The financial media has been speaking on the “ugliness” the markets are about to endure in Dennis Gartman’s words. Bill Gross was quoted as saying the future is a “downward sloping glide path filled with cancer, stroke, and associated surgeries…etc”. Buckle your seat belts, it could get bumpy.
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