Bears Need the Prestige

Christopher Nolan's 2006 film, The Prestige (my personal favorite as his best work, as I am not as much of a fan as his more popular films) describes every great magic trick consisting of three acts: The Pledge, The Turn, and The Prestige. Michael Caine's character walks throng each element several times throughout the film. 

In the current market, bears have fulfilled several elements in order to cement a major downside reversal of the melt-up which began at the very end of March. 

However, you have probably noticed the persistent rotation attempts, such as into the large banks, some beaten-down consumer names, the largest firm by market cap (AAPL), and small caps at any given time in order to offset the harsh selling in the AI plays and tech, overall. Indeed, we are seeing just that today well into the afternoon portion of the session, with the Nasdaq and semis shrugging off any inkling of "peace talks" between the U.S. and Iran. 

True, oil, is down hard, which still may be a mere buyable dip as the USO ETF is merely testing its 50-day moving average after surging above it early last week. 

But with the VIX still below 20 and the VIX ETFs yawning at today's action, it is becoming increasingly clear that bears need to press tech/AI names even harder to the downside in order to finally create some fear into this complacent market. A surprise rate hike at the July FOMC this Wednesday could also do the trick, especially with a Committee stacked with newfound potential hawks like Waller (passed over for the Fed Chair) and Powell (bullied by Trump for years, also trying to pad his legacy as not being a super dove) logical votes to raise rates sooner than later.