It was a poor day for the indices, with steady selling all day but not bad enough to end the recent uptrend. There were a couple bounce attempts but no significant recovery into the close, which is a negative.
Breadth was around two to one negative and new 12-month lows quickly expanded to around 240 while new 12-month highs fell to 180. Technology names led to the downside with the Nasdaq 100 ETF (QQQ) lagging with a loss of about 1.1%.
While the price action wasn't good, what was most troubling about the action today is that it was primarily driven by worries over interest rates. The 10-year Treasury yield hit its highest yield since 2011 at 3.07%, and 30-year mortgages also reached multi-year highs.
News that North Korea is threatening to withdraw from the upcoming summit due to United States military training in South Korea caused a rush for safety and bounced bonds in the afternoon. This prevented a weak finish but the worries about rates are unlikely to go away that easily.
While there isn't any compelling technical reason at this point to abandon ship, there are some negative narratives that are gaining traction and justify a higher level of vigilance. I was a bit more aggressive in cutting some losers and taking profits today but continued strength in biotechnology stocks prevented damage.
I'm not a bear but I am concerned about this market's reaction to interest rates and am ready to shift my market bias quickly should it continue Wednesday.
Have a good evening. I'll see you tomorrow.