Stocks Drop On May 6 As Financial’s Send A Dire Warning

Stocks sold off the final 30 minutes of trading today with the S&P 500 dropping by around 70 basis points finishing the day at 2,848. It feels as though we are running out of steam here and likely to see a pullback to a potentially large degree. I went through all of this in a video today, noting shifting trends. It all leads me to believe that the S&P 500 is looking to retrace back to roughly 2,500.

Even the RSI is now starting to show signs of fatigue here with a few days of lower highs. 

S&P 500, spx


Meanwhile, for now, there is a downtrend that has formed in the Qs with the potential for a move back to $212.


Financials (XLF)

But perhaps more worrisome is the performance of these bank stocks. I noted a potential double top pattern is forming in the XLF today. The ETF is very close to confirming this double top pattern as well.  I also pointed out in the midday commentary for paying subscribers that the three big banks JPMorgan, Citigroup, and Bank of America, are all breaking down

We care about this group because they are economically sensitive, and is the one group that can recoup the most during an economic upturn. Clearly, on the verge of breaking down, the bank’s stocks may be saying the economic recovery is nowhere to be found. 


Citigroup (C)

I have highlight Citigroup a few times now. I think it is easy to see what is happening here. A drop below $41.20 gets the stock moving back towards the March lows. 


Boeing (BA)

Boeing fell below support today at $126, and it appears to now be on its way to $102.

Apple (AAPL)

I mentioned in the midday that Apple might be topping out here. It is at $303 a robust level of resistance, and it appears it may be forming a rising wedge. A drop below $295 means that the stock has room to go to $265. 


Amazon (AMZN)

Amazon is creeping very close to the uptrend, with a drop below $2,285, setting off that drop to $2,100. 

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Disclosure: Michael Kramer and the clients of Mott Capital own AAPL

Disclaimer: This article is my opinion and expresses my views. Those views can change at a moment's notice when the ...

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