These Levels Have Some Summer Pull

With the Dow Jones Industrial Average tagging its 200-day simple moving average for the first time since early-May, equities as an asset class have the the general feel of an ongoing, tedious summer consolidation or slow-paced correction.

The pace of the selling could easily pick up if market players become cease to enjoy the ongoing sector rotations we have seen for a good while, which have not only staved off bear raids but also galvanized momentum traders but also partake in a seemingly endless game of musical chairs. 

However, with the large cap banks weak again, and Goldman Sachs printing nine-month lows, for example, all the while tech unwinds, we think a defensive approach still makes sense as we wind down the end of month and quarter. 

Also, despite crude oil hanging tough, energy stocks seem to be fighting uphill at the moment with broad market pressures. 

As far as levels we are observing, it is often best to keep things simple in a situation like this--The S&P 500 (on the daily chart, below) lost the significant 2,742 level this morning, at least for now, and the 50-day moving average (dark blue line) is now just below at 2,716, and rising. If bulls fail to present themselves around this area, it is almost assuredly a signal to back off the long side even further, regardless of the patriotic, typically bullish Fourth of July holiday coming up.