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Stocks finished lower today, ahead of a pivotal three days. It kicked off today with Microsoft (MSFT) earnings and will continue through the night session with the BOJ, followed by the Fed tomorrow afternoon and Meta (META) after the close. Thursday will bring us Amazon (AMZN) and Apple (AAPL), and Friday will be the big jobs report for July.

The USDJPY was lower today as traders worry that the BOJ will hike rates tonight to 25 bps and will cut its bond purchase program. This sent the USDJPY down 152.75. The big area to watch is around 151.50; a break of support at the prior highs could be important and indicate that a drop to the mid-140s is possible and, more importantly, put that long-term trend line in play.

The move lower in the S&P 500 today helped to fill the gap from Friday’s opening. The index also hit the 10-day exponential moving average and failed there, closing below the 50-day moving average.

Technically, the pattern looks more like a bear today, which is being formed within the bigger, over the past couple of days within a larger and longer-term rising wedge pattern we have been tracking for several weeks. A break below 5,400 likely means the bear flag is broken, which would indicate that the rising wedge could be broken. If, by week’s end, the rising wedge is broken, it is likely because the move higher in the index is over.

The pennant in the Nasdaq broke lower today, allowing the Nasdaq to move down to the trend line that started in October. A break of that trend line would also be an important change in trend.

Microsoft reported results tonight. I have owned this stock for a really long time, since early 2019, and reading through them, they weren’t that great when compared to the expectations. The beat on the top and bottom was minor, commercial cloud revenue was a miss, intelligent cloud revenue was a miss, Azure growth was a miss, Capex was higher than expected (not good), and free cash flow was a miss. It just isn’t often you see so many numbers that miss expectations across multiple categories. You can’t miss when trading at 36 times the next twelve months’ earnings estimates.

Guidance will be key, of course, but it seems clear at this point that the ascending broadening wedge is now broken, and support at $396 is essential. A break of support at $396 could lead to a further drop to $370.

It wasn’t a good day for Nvidia (NVDA) either, with the shares dropping some 7%, breaking below support at $109, and the next major support level at $95. I think the double top has been confirmed at this point, and, interestingly, a projection of the top of the double top to the neckline suggests the stock falls to around $95.

Nothing tomorrow back on Thursday.

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