Rates Weigh Down the Market

Well, forget about this being bullish - even temporarily. The market is losing momentum, and all these hyperbolic charts are looking sick.

The interest rates are starting to weigh on the market. A number of weeks ago I pointed out that the Utilities were going to get smashed, and they have been. The head & shoulders pattern is crystal clear now.

The reversal today was extraordinary. Below is the Russell 2000. The open was a new lifetime high on this index, and the close was substantially below it. The portion rectangled in red is the "churning" that's been taking place above the former resistance trendline. It will need to smash below this decisively to clearly be bearish.


We've had good luck with Autodesk a couple of times before, so let's try for a third. This is pushing up towards a medium-sized resistance line. I'd say short this and stop at any price above $44.


We've also been watching Genentech for a while, and it's finally broken its neckline. This is a pretty massive pattern, so it's fairly promising, especially considering the poor performance of biotechs over the past few months when the market as a whole has been pretty strong. I'd suggest shorting this one, stopping out at any price above $89.91.


Have a good weekend, everyone!