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Financial earnings having tough time helping Equities extend given bearish structure

US equities have shed nearly all of today’s early gains entering mid-day with S&P showing just fractional 0.20% gains while the Russell 2000 has turned negative.   Breadth has deteriorated during the session and now stands nearly Equal with just marginal Advancing issues over declining, but VOLUME is actually higher in Declining issues than advancing right now.  Energy, Healthcare, Utilities and Real estate are all negative on the session while Financials, and Technology are leading, though well down off early highs, with both showing just 0.50% gains.  The US Dollar continuing to make headway vs the Euro , Pound Sterling and Yen today while Treasury yields have lifted with the yield curve steepening across the board.   Crude oil’s intra-day decline could be pointed to as one factor of importance, as this has led down Energy and both WTI and Gold showing mild losses

Overall, the extent to which Financial earnings fueled bullish sentiment in most to thinking the worst was over was a bit misguided , as S&P had NOT made any real structural improvement after breaking down earlier in the week.  Momentum and breadth remains a near-term concern and we have just 27% of stocks now OVER their 50-day moving average which is lower than we saw in September and now at the lowest levels since June.    Advance/Decline peaked out in late September, while the number of NYSE stocks hitting new lows, while not an outlandishly high number, has risen steadily to the highest levels in a month.    Bottom line, given the structural breakdowns in many of the sectors in the last week, it’s tough to put too much faith in Financials in thinking this sector has bailed out the market just yet with an ongoing surge in volatility and still a couple weeks left in the month of October ahead of next month’s election.  With the mood understandably grim, yet NOT truly bearish.. we’ll need to see more evidence of sentiment turning more fearful before thinking lows are in.