Total Equity volumes exploded yesterday +25% vs the 1 month avg. People who tell you “volume” doesn’t matter are full of it. The market was fat and lazy and no “new money” was being put to work all the way to new ATH’s in July and then WHAM! You get the big flush and money runs for the exits and volumes explode. 

China- No bounce last night – Shanghai lead the losers overnight

Earnings have been gradually coming in worse, with 400/500 S&P 500 companies reporting an intra quarter low of 1.2% growth and now tech, energy and consumer discretionary stocks posting y/y negative growth. Earnings are slowing and they’re beginning to slow at a faster pace (rate of change). 

Clearly, I can’t stress this enough, in big bold letters. 2820 is a VERY key level in the SP500 – a close below that level flips the longer-term (2-3yrs) chart set-up to BEARISH trend.  We are currently in a Bearish formation from a3-6month set-up. This is where your trend-following funds get bearish on the market.

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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. John made his move to the commodity industry at the end of 2005, and began his path at Lind Waldock, at the time the largest retail brokerage division worldwide. John did his undergraduate work at Robert Morris University in Pennsylvania from 1999-2003, where he was a 4 year varsity basketball letterman.  A self-professed “Macro Trader”, John uses a multi-factor fundamental and “quantamental” trading model in distinguishing market cycles based upon the accelerations or decelerations of growth and inflation metrics. His technical and quantitative approach is heavily reliant upon trend and market range analysis via a custom built standard deviation system in helping him make probability-based market decisions. John is an avid reader of all things pertaining to finance, and behavioral economics. Click here to sign-up for John Caruso's Trading Coach Insights. Daily information and insight on all futures marketsin ranging from metals to equities.
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