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It’s been a volatile earnings season to say the least. Coming into last week, we saw positive market internals, but then, on Friday, a sudden, tremendous shift occurred.

This earnings season has been marked by two-sided action. Earnings misses have been punished viciously, while earnings beats have only been modestly rewarded.

Now we’re starting to see money flows into more defensive sectors of the market. This is rather concerning in the near-term. 

Here’s what I mean… 

Bulls No Longer Have Benefit of the Doubt

An updated look at the sector leader scoreboard shows that bulls really have their work cut out for them now.

Literally none of these sectors are growth or bullish-oriented. This tells us that money has been seeking safety within the market.

The speed at which this developed is noteworthy. Just last week, tech was the top-performing sector, but now with consumer staples capturing short-term momentum, it’s a major warning sign that this market could get worse before it starts getting better. 

Bears are in control of momentum now.

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