If you’re bearish…

The tenor of the market changed with yesterday’s reaction to the Texas Instruments and Qualcomm earnings guidance.  Before yesterday, bad news was good news and good news was good news.  But the good news from TXN and QCOM just wasn’t good enough to continue lifting the market higher, indicating to me that we’re due for more consolidation. 

Yesterday’s decline took the NDX out of its nicely rising trend channel, marked in blue on the chart below.

Ndx_120905_hourly

I would expect the NDX, which has been outperforming, to fall while the SPX trades sideways and "catches up" relative to the NDX.

Spx_120905_hourly

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