I know it is late and you were expecting this update hours ago… but, I have been busy! I had to say that because that is the number one excuse I hear form everyone today when I ask why something is not done. Yes, we are all busy and doing more than we should, but in the end that is what makes life worth living… being fully engaged and sliding into the grave yelling, “what a ride!” That said, what is the problem with investors? We started the day worried about the Bank of Japan, but the buyers brushed that off and stocks found their footing to rally higher in early trading. At 2:30 pm the sellers stepped in to test the resolve and down we went with the S&P 500 index closing down 0.9% on the day. Why?

 First, Bank of Japan surprise move relative to stimulus and interest rates sticking for now. The move by the BOJ caused a rally in the yen, devaluation of the dollar, a rise in oil prices and worries globally. Not bad for a meeting where news is not in alignment with expectations. Compared to the FOMC meeting in the US which turned out almost perfect with expectations and stocks rallied. All this validates is the uncertainty about the markets overall and the instability of a market driven by interest rates, stimulus and hope.

 Second, technology (XLK) stared the day positive with earnings from Facebook leading the move. By mid morning that positive shifted to negative and the selling ensued dropping 1.2% on the day. The SOX fell 2.6%, networking (IGN) fell 1.2%, Cyber Security (HACK) fell 1.4%, Software fell 1.6% and Social Media (SOCL) rose 0.7% on the Facebook earnings. The challenge remains earnings and the outlook for growth moving forward. If technology is losing and money is rotating where does that leave the outlook near term? Questionable at best currently and watching to see how the sector unfolds near term and what the impact is overall to the broader markets. Support is $42.25 and the 200 DMA. A break lower is a negative sign for both the sector and the broader markets.

 Third, commodities are running on inflation speculation, rotation of money and speculation in crude prices. As they say… ride the horse until it dies, then dismount. The belief is more important in this sector than the reality. Take what is working as the belief drives prices higher near term. Gold cleared the $1250 level breakout and continuation  upside today. Crude moved above $46. Gold miners spiked 4.5%. Silver followed the crowd gaining 2.4%. This is where the money flow is, but the risk is high from my view short term.

 When it is all said and done on the day the sellers did something they have been unable to do… get control into the close. Tomorrow is a day of interest as it relates to the sellers. Do they follow through? Do they run? VIX jumped above 15 on the day and puts everyone on notice. 16.2 level of resistance up next. One day at a time for now as the resistance at the 2100 level for the S&P 500 index is keeping a lid on the upside for the index. NASDAQ 100 index broke support on downside and confirmed the move today. Exit points hit on the index and the downside pressure is building. Stay focused and be disciplined in protecting the downside risk.