The negative narrative that began Thursday with the poor action in the semiconductor space due to worries about smartphone sales is gaining further traction Friday morning.
OTR Global reports that its first-quarter check in Asia indicates the Apple's (AAPL) prospects have declined due to increased competition and there is a very large reduction in second-quarter orders in China. What's more, the trade war with China is gaining traction, which is adding headwinds to the equation.
Another problem today is that President Trump's tweet about oil prices caused a sharp reversal in that sector. This has been a group that has benefited from rotation recently but now has some trapped bulls and is causing selling pressure.
These struggles have impacted sentiment and we have poor breadth and no real leadership at the moment.
One bright spot, however, is Twitter (TWTR) . It bounced back strongly in sympathy with the move on Netflix (NFLX) earnings and has enjoyed a couple of recent positive analyst upgrades. Last week Goldman Sachs (GS) made favorable comments about the stock and today it was upgraded and given a $40 target by MKM Partners.
Twitter finally gained traction after its earnings report last quarter and expectations are high for its next report on April 25.
In the short term the key now is for TWTR to hold the $32 level which is close to the 50-day simple moving average. It still has some technical overhead up to $36 but it is looking like it has the potential to perform into earnings unless the overall market struggles.