US equities remain vulnerable as the major averages break below key VWAPs from their April 7th lows.
At the same time, critical polarity levels are acting as brick walls for major sectors and industry groups after a weak bounce attempt.
Whether it's Semiconductors, Financials, or Software, buyers are failing to reclaim the broken support levels from earlier this month.
The SPDR Financial Sector $XLF is a textbook example of this theme.
After briefly pushing back above the neckline of this top, XLF is now getting rejected right around 48.
This is a classic example of supply overwhelming demand as a former support area is cemented as new resistance.
Sellers are defending critical levels with conviction, opening the door for further downside across the board.
We’re seeing this kind of price behavior all over.
But as far as Financials go, as long as we're below 48, the path of least resistance is lower.
And losing Financials is never a good thing for the broader market.
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