Swingers

On the back of swirling, competing headlines about whether or not Iran may be willing to negotiate a deal centered around enrichment suspension, we are seeing what can best be described as, easily, the most volatile and highest sell volume market action since this latest melt-up in late-March. The QQQ ETF (for the top 100 stocks in the Nasdaq) daily chart, below, illustrates both points, with the massive daily price candles two out of the last three sessions coupled with prominent spikes in sell volume bars (bottom pane of chart). 

By now, it should be obvious that the White House is sweating every single tick of several markets, be equites, bonds, currencies like the Yen, and, of course, crude oil. It is becoming gradually accepted by even seasoned market veterans that the White House will do whatever it takes to keep juicing equities into the coming AI IPOs, and then the midterms in November. 

Still, the fact remains that when we see price swings of this size, especially after such a one-way rally for an extended period of time, it typically suggests a violent shift to a more volatile and, ultimately, bearish regime. 

My take is that tomorrow's Consumer Price Index is still the centerpiece of the week in terms of macro events. Expectations are for a 4.2% year-over-year print, which makes it still hard to believe that we are on the doorstep of a sustained bull market in either stocks or bonds given how insidious sticky high inflation truly is over time.

The other overlooked issue for this market remains the underperforming MAGS ETF. You are talking about the most mega of caps, with AAPL MSFT NVDA TSLA leading lower today. When we think of "distribution," or heavy selling by institutions of size, we are often told that it is easy to see the footprints of their selling. In reality, there are also tons of distractions elsewhere when it is taking place.

And I believe now is one of those times.