3-4 more days of weakness look possible before a low

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US Equity trends managed to hold up once again despite the violent early session break to multi-month lows.  Crude remains pointed higher, while Interest rates and the US Dollar have also pushed higher in recent days.  Overall, I am betting on more downside for US equities over the next 3-4 trading sessions despite what feels like a market that refuses to break down.  While this might be technically correct for SPX and QQQ on a close, the market breadth proved far more damaging on today’s decline.  Additionally, there was evidence of High-yield weakness and a general lack of capitulation at the lows.  While I’m in the camp that further weakness this week likely proves short-lived and shouldn’t last more than another week, it’s hard to be bullish given the breakdown in Semiconductor issues. Furthermore, WTI Crude has not provided evidence of peaking yet, despite some Energy stocks having lagged performance in recent days.  Overall, I sense that the next 3-5 days might provide better proof of weakness that lows could be near. At present, it looks too early to get too emboldened about a low simply based on Tuesday’s snapback alone.

Tuesday’s recovery doesn’t serve to improve the near-term technical picture despite markets having avoided a technical breakdown of the range now for the second straight day. 

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