So Tall, They Might Just Be Short

This remains a slow summer market, and while I recognize that equities look and feel like they will remain docile to whichever fiscal and monetary policies come their way for the foreseeable future it is worth remembering that boring summer markets have a knack for lulling us all into that precise sort of thinking. As we noted yesterday, however, the tone and tenor of the price action can change rather quickly, especially as we limp towards Jackson Hole in roughly two weeks and then the Labor Day holiday after that. 

Small caps in the IWM remain pinned below their 50-day moving average, and transports remain below their own 50-day despite bouncing for the second day in a row. 

Still, we know equities have laughed off most divergences for a good while. But a major reason why they were able to do so was due to the monster market cap names dominating the upside. 

Thus, when we see the likes of AMZN and Visa, respectively below on their daily charts, both weak without too many people noticing nor seeming to care, it does raise the specter of some hidden complacency in the market that equities simply must mark time in lieu of us setting up for a more standard price correction. AMZN below $3300 would likely become more problematic for QQQ and indeed the sentiment towards growth names. 

And Dow name Visa following-through lower yet on the highlighted head and shoulders bearish top should start to turn some heads. 

For now, though, the weakness in both names which have been standing tall for the better part of a decade seems to be flying well under the radar.