Michael Riesner and Marc Müller, technical analysts for UBS, continue to sound the warning bells for a sharp sell-off in the S&P 500.In a new note to clients today, they write:
With an increasing number of non-confirmations in our daily indicator work we expect the US market to move into an important tactical top in the next 5 to 10 trading sessions, followed by weakness into later August and into September. A break of 1390 would imply a test of the March high at 1422. Key support is unchanged at 1325. A break below 1374 would initially be negative.
The analysts warn that although new reaction highs on both the Dow Jones Industrial Average and S&P 500 indexes is bullish, the “breakouts are getting no confirmation from the broader market, technology, the transport sector or the SOX, which we still see as key indicators in confirming moves in the SPX.”
(The SOX is an index of companies that manufacture semiconductors.)