Selling Pressure Upon us, but will the Trend Change?

The market’s wide selling pressure yesterday had the Tech ($QQQ) leading the major index ETFs lower. I wanted to follow up on the anomaly that I was picking up on yesterday, Utilities ($XLU) rising with 10 yr rates ($TNX) over the last two weeks.  Utilities diverged, finally, getting smacked down (that is a finance phrase by the way) after weeks of moving to the upside with Treasuries. If the rise in rates continues, yield mongers may ramp up selling not only Utilities ($XLU), but also REITs ($IYR) – which actually were leading to the downside yesterday.

I did not like the weakness in the Tech ($QQQ).  Semiconductors ($SMH) fell over 1.9 percent. Watch chip names like Broadcom ($BRCM) and Intel ($INTC), there could be a short-term pullback in these bullish names.  But, I do not expect an outright trend change to the downside.

With the yield curve moving to the upside, Banks ($XLF) and Brokers ($IAI) held up well.  Regional Banks ($KRE) held up the best of this group, only losing around .50 percent.

Finally, The Metals & Mining ($XME) sector held up relatively well and declined just .07 percent. What was really impressive was the move in Steel ($SLX), which was up almost 2 percent. Let’s see if Materials ($XLB) and Natural Resources ($DBC & $USO) continue to catch a bid today.

Have a great trading day!