This is rough. GDP came in at 1.9% for Q1 from the prior estimate of 2.2%. Initial jobless claims were higher than expected, and Chicago PMI data for May was pretty weak.
Only one chart stuck out to me this morning and that was buying (green) vs. selling (red) volume. We hadn’t had a big move in volume ‘pressure’ recently, but yesterday the sellers took over, breaking past the high experienced when the S&P put in a low just under 1300. As long as selling volume is in control it’s hard to have much hope for a continued rally.
Looking at sector performance, JC Parets did a nice post this morning look at sector relative strength to the S&P, which shows the defensive names leading through May.
Sector performance is indicating a defensive posture, the euro continues to show weakness, economic data just isn’t strong enough to put in a bid at these levels, and sellers are giving buyers an ass kicking. Not pretty. The May 18th low when it hit the 360-day MA was the line in the sand. I’ll be watching to see if that low and that moving average hold if we get down to that level.
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