Europe continues to move lower as tensions in Ukraine weigh on European indexes.  US stock futures were lower this morning, but weren’t matching the level of decline as seen in Europe.  Sellers picked up momentum as the morning wore on up until President Obama began to speak just after 11:15am EST.  Buyers were able to push stocks off their lows, but would not be able to sustain the level of buying needed to elevate the indexes into positive territory.  The final hour of trading wasn’t strong as the market pulled back into the close.  While not ideal the day was still a solid one as we have been able to hold-off selling for the most part.  We have some big earnings coming this week and it will be an important to see this market break free into new highs.

There is something going on in Europe as EWG, EWQ, and EWU are in downtrends.  EWG was a leader in Europe, but what we are seeing now is severe weakness.  Price is certainly telling a cautionary tale and appears there is no end in sight.  The lone bright spot on the day for EWG was the support it received at the 200 day moving average.  On the flip side, US markets have been able to hold up relatively well despite the turmoil in Ukraine and Israel.  Keep an eye on Europe as the continent continues to display weakness relative to the US.

Perhaps a canary in the coal mine may be the High Yield/Junk Bond market.  The hunt for yield forced many to plow into the Junk Bond market.  We can track using the following two ETFs:  HYG and JNK.  Both ETFs have had a fabulous run.  However, it appears now both are heading into new downtrends.  Downside volume has trounced upside volume as sellers have hit both of these hard.  Most will point to 2008 as an indication the Junk Bond market is the signal you need to pay attention to.  We won’t go that far, but we won’t ignore the selling either.  Follow the price trend and for now they have flipped into a downtrend and this is all we need to know.

We continue to wait for this market to find its way.  Earnings season has been solid, but typically earnings and the economy are best at stock market tops.  If we can’t break away from this recent churn we may very well have a short-term top on our hands.  Adhere to your price signals and execute.