Early Update – Flag Consolidation Becoming Clear Again

The stock market is off to an incoherent, mixed start. The averages are down -0.2%, Small Caps unchanged.  The open was mildly bullish, but it looks like stocks quickly lost the upside impulse and edge.

S&P futures (1m) mostly in line from yesterday with slight non-confirmation this morning and prices catching down after the open.

8 S&P sectors are down, most 0.3% with no clear bias other than rate sensitive sectors. Financials +0.2% are benefiting from higher yields, the defensive Consumer Staples, Utilities and Real Estate are laggards. Health Care 0.7% is the worst performing.

Like a number of cyclical sectors pointed out yesterday, after relative strength, Health Care is returning to the original flag consolidation trend expected Tuesday.

Health Care (5m)

There’s a bit of noise across the market in the consolidation phase, but the two most heavily weighted S&P sectors, Health Care above, and Technology below, both reflect bearish flag consolidations off Tuesday’s low as initially expected. That’s the overall take-away theme.

Technology sector (5m this week)

We can see that in S&P now headed for $3100.

SP-500 (5m)

Thus far yesterday and today are confirming the bearish flag consolidation, which leaves the door open for another decline of approximately -1.4% to -2.4%.