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Five Takeaways

• Yesterday was a rough day for the market leading FANG stocks.  The Facebook news was clearly the news story that broke down the Nasdaq and overall market yet only 3 technology stocks in the S&P/NDX hit 20 day lows (FB, CERN, CDNS).  The cyclical focused stocks had the most 2 day lows.  Not discussed enough is the large drop in Oracle after earnings yesterday.  Oracle is BIG DATA and a powerhouse in cloud.  Down 10% today.  I've voiced concern that the huge earnings ramp earlier in the year with estimates was setting the bar way too high.  This could be an early read on Q1 earnings.
  
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• Inflows last week were the third highest ever for the QQQ and yesterday what was put in last week was potentially taken out.  I've warned about extra quick trigger fingers with passive ETF's.
  
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• Nearly every major US Index/Sector ETF on my PPO monitor is back below the 10 day and 20 day moving average by an average of 1% and .50%.  
  
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• The VWAP (volume weighted average price) support levels calculated from the 2/9 low on all of the major Indexes and major ETF's are starting to break which means the buyers in the last month from the lows have an average cost higher.  VWAP support levels from 2/9 low:  S&P futs: 2757, Nasdaq 100 futs:  7045, SPY 271.75, QQQ 166.65, IWM 153.20, DIA 249.50, SMH 106.30, KRE 63.00, XLF 28.85, EEM 48.75. (bold are those that are trading below VWAP support)
  
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• There is no safe place to hide. FANG and large cap tech have been where people have been hiding but that could be over. Traditional safety trades -  Bonds haven't found a bid, gold nope, commodities not so much.  Europe hasn't been able to rally with follow through, while it's a mixed picture in Asia with some markets hitting new lows and some stable.  
  

SPX bullish sentiment is at 47% back under 50% and down from 59% the previous day.  

SPX remains under the 50 day moving average.  Support remains at 2700 and 2673.

SPX with the Countdowns visible show it on day 10 of 13.  

Nasdaq bullish sentiment took a big drop to 45% down from 60%

NDX back at the 50 day.  It's been the best index by far and only one that had hit a new high above January.  Naturally people will try and buy the dips as they are today.

ETF inflows and outflows.  Large outflows yesterday

Today's NDX attribution shows no surprise that AMZN is adding 11 points and FB is subtracting 12.  AMZN attribution nearly 3x AAPL.   FB mega weight very evident

The Dow is holding support under 25,000 and has been the weakest of all the major US indexes.  The wave 3 downside price objective is at 22,157.  We have to break the 2/8 (low close) first

The Dow with the Countdowns visible show it on day 9 of 13.  

IWM Russell 2000 ETF has also been pretty strong and bounced off the 50 day yesterday too.  That's first support now.  

Rebecca Cheong at UBS is quite good and her "recovery score" has some readings not seen since other VERY significant market periods of stress.  

"Our Intraday Recovery Score continues to deteriorate and is now sitting at -16%.   In " Mar 13, Recovery Score dropped further" we highlighted that our recovery score dropped further to -12% - the first time it fell below -10% since Jun-Sep 2008 and the 10th time since 2000.

Based on our new analysis analyzing recovery scores around all the large drawdowns since 1985, it is the only time since 2008 that our recovery score got worse after an over -10% initial sell-off.  In the last decade, large sell-offs have been followed by sharp rallies and a sustainable return to "buying the dip" (blue highlight).  However, this time is different - market confidence has deteriorated (instead of improved) since the Feb sell-off, something we’ve only seen 3 times since 1985 – Sep00, Mar02 and May08.  On average, SPX peak-to-trough return was -22% (orange highlight).  While we don't expect similar drawdown without an external shock, we are concerned about the current weak internal dynamics in the market."

German DAX continues to trade sloppy although there is an upside red Countdown on day 7 of 13.

Euro Stoxx 50 doesn't have a countdown and needs to make a new higher high before I get constructive on the long side.

US Dollar bullish sentiment is at 52% and stuck here in a recent tight range.  

That tight range is seen on the DXY Dollar Index and there are upside Countdowns in play but can't get a response higher.  Above 91 and people will take notice

Japan's Nikkei has been going sideways holding the 21,000 level and is on day 12 of 13.  Keep in mind for the 13 to trigger it has trade under the 8th red bar close and that's right at 21,000

India's Nifty 50 Index made another new recent low and is on day 12 of 13 with its downside Countdown.  

Crude bullish sentiment is again at 50% smack in the mid point

Crude is having a good day today after holding the 60 level.  My view is crude has risk to the downside with the recent downside Countdown yet I'm not short as I want to see it break 60 first.  

As I mentioned above there were a lot of new 20 day lows within the Cyclicals.  Consumer discretionary is weighted with AMZN with 20% of the index.  A dangerous sector right now.  

Libor OIS spreads are now wider than 2011 when Europe was getting crushed.  This has far reaching implications obviously that the markets haven't woken up to yet.  

As I showed yesterday, Bitcoin held the TDST (dotted green line) at 7752 and had a green Setup 9.  I could see another lower high bounce attempt with an outside chance of moving up in a 5 wave up sequence.  The only way that would be negated is if a new recent low under February's lowest close happens.  There is a downside wave 5 price objective at 1135.  

Bond bullish sentiment is at 35% for the second day in a row.  A move over 50% would give me confidence a bond bounce was happening.  

TLT Bond ETF had a good upside exhaustion Countdown 13 in December and now is on day 10 of 13 with a downside Countdown.  A close under the 8th red bar 118 is needed to trigger too.,  

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