The 20DMF now displays a negative divergence and
even closed very near the dreadful short level.
Most sectors displayed negative Money Flow patterns as the selling was general. Maybe an Opex related issue, but
the fact that XLF/XLI now display negative MF tells us that something is definitely wrong on large sections of the market.
XLK, XLE and materials stocks were also relatively weak.
We can see that the 250 smaller group of stocks of the S&P500 now display a rather deep negative Money Flow. This pattern does not occur out of the blue but simply because funds are selling.
As a consequence, the number of days until a short signal is issued is now close to zero.
Interesting also to see some weakness in the 10Y Treasuries. This tells that investors still expect rates to increase.
The Yield model points to a market that expects the 10Y rates to move to 1.75% in order to justify the current price.
Conclusions:
The transitory or non-transitory discussion about inflation is not over and will be the major issue of this market for a long time.
Because the S&P500 failed to test its previous high and displayed a miserable close yesterday, there is now downside room to test the 50MA. It is however not a prediction. I bought some protective puts yesterday one hour before the close just in case.
