A Notably Bearish Trading Session

I don’t know much about the news that Apple (AAPL) announced today, but I do know that the market wasn’t impressed and much of it appears to have been priced in already:

 

AAPL_Daily_9.9.2015

AAPL printed a bearish engulfing candlestick on thick volume today. While I am less concerned about AAPL stock, AAPL’s performance today is indicative of a dreary and potentially highly significant trading session for equities.

The S&P 500 ran into resistance just below the major confluence around the 2000 level, which happens to not only be a big psychological round number but also represents the 50% retracement of the entire July/August decline:

 

SPX_Daily_9.9.2015

Many other key equity sectors printed similar bearish candlesticks at resistance – a couple of notable examples:

 

Russell 2000 (IWM)

IWM_Daily_9.9.2015

Bearish engulfing candlestick forms after failing at the 38.2% Fibonacci retrace of the June-August decline as well as the backtest of the lower rail of the downtrending channel.

 

SPRD S&P Retail Index (XRT)

XRT_Daily_9.9.2015

One of the trademarks of bear markets is early strength which gives way to late session weakness, today we saw exactly that. While I am reluctant to turn into a “mega-bear” and call for a 20%+ market decline, from my perch it’s quite reasonable to expect that the August 24th lows will be retested over the coming weeks.