More Bank Downgrades Nasdaq Sellers

Overnight saw weaker Chinese trade imbalance data, Italian banks down on new windfall profit tax and of course further rating downgrades for US regional banks by Moody’s. What a timely downgrade as we posted our “negative carry” chart yesterday all over our feeds and we suspect the leverage will continue to plague the sector. Yea we know the BTFP is there to swap underwater bonds for 100% cash, we get it, but it doesn’t change the underlying problems…

Anyway we saw equities hit pretty hard as the Nasdaq at one point was down about 270 points near 15220 but did recover a bit with steady afternoon buyers which came in about 3 separate waves. We took a look at the Dow Jones chart for the futures and we have to say, pretty formidable resistance is once again dominating the theme now:

Weakness in the broader sectors and a roll over lower out of the high flying MegaCaps doesn’t bode well for the next quarter. We also took a look at the DAX Index futures chart and we absolutely think this rock is ready to roll: