NQ8 was still the leading sector. NFLX releases earnings on Monday and could lead market sentiment for the following days, until the bigger NQ8 market caps publish earnings later this month.
Small caps are definitively weaker.
The main story is however related to interest rates, which pulled back in the past two days, weakening the US$/Euro and helping gold moving higher.
We can however note that the Total Effective Volume pattern on the 20Years looks very strong, which is typical of many wrong footed investors. This tends to tells us that the rate pullback might just be technical and could reverse again when Treasury shorts close their positions.
I also noted a negative divergence in oil.
Both the XLE and the OIH Money Flow patterns look rather bearish here, although the XLE Money Flow is still above 0.
Conclusions:
I believe that the Treasury selling will be short-lived and that the US$ will strengthen again soon when rates revert higher.
For now, I would not be long oil or oil producers. I would also not be long the Small Caps.
This does not say that I would short either oil producers or the small caps. Market sentiment is still too bullish.
