Markets were struck Tuesday to open the holiday shortened week. The Nasdaq took the hardest blow lower by 1.1% and the S&P 500 dropped 1%. All 3 major benchmarks dealt with their big round numbers, and found firm footing, with the Nasdaq finding support at the round 5000 and the S&P 500 and Dow at the 2100 and 18000 figures. Reasons given for the decline were interest rates rising later this year. To me it is just noise as this has been known and even if they are heightened later this year, markets usually are not spooked historically by the first or second rate increase. It takes some time, but if thats what the media wants to blame it on so be it. Obviously all ten major S&P 500 groups fell today but energy was whacked hard as the rising dollar hurt crude. The sector fell by more than 2%. Many have called for oils demise and they may be looking right at the moment, but going forward time will tell how those predictions play out. Looking at XOP it is potentially looking at a fourth consecutive weekly decline. The ETF is back below the round 50 number which it lost 5/19-20. To me it looks like a possible bullish inverse head and shoulders pattern could be developing if the 49 level holds on a closing basis. The strong greenback put pressure on foreign stocks as well. From Irish homebuilders like CRH to Indian auto plays like TTM, they were all affected. Below is a look at the TTM chart and a great example why even the best looking of breakouts must be monitored closely after the move.
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