Late last week, we pointed to Italy as the next forward catalyst; true to form, that's the reason being assigned to yesterday's downside rhyme.
To be sure, the global financial machination is a multi-linear dynamic. The causa proxima, as my brother Jeff Saut likes to say, was a confluence of concerns ranging from "the Italian election to a collapsing euro to sequestration, dysfunctional government, etc." Truth be told, it doesn't really matter; just as the bulls were loath to credit the government hand for the rising tide that lifted all asset classes, the bears need not justify downside causation.
For my part, after trading like a banshee last week, I sat yesterday out -- and while it's frustrating (given my stated bias yesterday), I often remind myself that if my greatest cost is that of opportunity, I should consider myself lucky. It wasn't for lack of conviction, mind you; it was more a function of time management; we unleashed Hoofy and Boo anew yesterday, and (nodding to Jeff again) the human mind can only focus on one thing at any given time.
To recap some thoughts from yesterday that continue to "matter," at least as much as one-quarter of our aggregate metrics can (fundamentals, structural influences, and psychology are the other three), I'll share four charts.
The first chart below is the CRB (commodities index) vs. the S&P (^INX) (as a proxy for the stock market); this is consistent with our oft-stated vibe that "commodity volatility typically leads to stock movement."
The second chart below is the S&P uptrend we've been monitoring, which introduces near-term support in the S&P 1475-1480 range, depending on when we get there (it's an upward slope; time and price are the determinants).
The third chart should be familiar to ye faithful; it's the tech stocks on the aggregate; NDX (INDEXNASDAQ:NDX) 2700 remains THE level of lore for traders galore (and, not coincidentally, where we closed yesterday).
The fourth chart is of the financials on the aggregate. BKX (INDEXDJX:BKX) 54 was flagged yesterday as a level that mattered for the banks, and by extension, the broader tape. As go the piggies, so goes the poke. Goldman Sachs (GS), Deutsche Bank (DB), JPMorgan (JPM) and Morgan Stanley (MS) remain the best single stock proxies for the sector.
As always, technical analysis provides a better context than catalyst-risk definition is our friend-so respect, but don't defer, as we together find our way.