In catching up on the charts after being away from my desk yesterday, here are a few things that I’m watching that stand out. After the market close today, we have 3 of the largest components of the Nasdaq 100 Amazon (AMZN), Microsoft (MSFT) and Intel (INTC), which collectively account for over 1/5th of the performance of the Nasdaq 100, with AMZN & MSFT also being top weighted components of the S&P 500 as well.

The first of the market leading FAAMG stocks, Alphbet Inc (GOOG,GOOGL), also a top-weighted component of QQQ & SPY, reported earnings on Monday after the close which led to a drop of over 5.3% during Tuesday’s trading session & dragging the $NDX down along with it as much as 2.8% that day.

Last night saw another one of the market leading FAAMG stocks, Facebook, report earnings with that stock currently poised to gap about 8% higher as I type, lifting the Nasdaq 100 futures along with it. My point is that any QQQ, SPY or other broad market position taken home tonight runs a substantially elevated risk of having the markets gap for or against that position at the open tomorrow. As such, this might be a good time to make sure that your net exposure to the market is inline with your risk tolerance.

While I was out yesterday, it appears the markets gapped down only to quickly recover those losses, trading mostly sideways through the remainder of the session to close essentially flat. Therefore, nothing has changed since yesterday’s video.

For those that didn’t catch the video, essentially I covered the fact that while my focus recently has been on technical developments on the intraday charts, I had taken my eye off the bigger picture which had both the Nasdaq 100 & the S&P 500 as well as many of its 11 sectors backtesting the recently broken uptrend lines from below.

The fact that the markets reversed & sold off impulsively following those backtests helps to validate those trendlines as important levels. This has the US stock market in a precarious technical position which tilts towards a bearish intermediate-term outlook at this time, especially if the lows from early February & April are taken out soon. As such, this is probably a good time to keep things light & maybe hold off from entering any large positions until the dust settles tomorrow or early next after the 3 big earnings reports tonight.