I hit my 10-point stop on the re-entry this morning – and the market is violating key levels that would have confirmed a turnaround. Whether in options, futures, or any other instrument, it is time to go back to cash.

The wild card this morning has been interest rates. The 10-year has breached resistance – rapidly approaching 1.5%. To read the chart above, you add a decimal point after the first number.

Let’s let the market find its footing. For now, the market met all prior pattern projections, and the reversal pattern we had identified as a possibility today simply did not materialize. While it may have started as valid; rising interest rates interrupted the process.

This is a market that requires near perfection to justify its levels. While likely reflecting a recovering economy, the ascent of interest rates requires an adjustment to equity prices – especially tech and growth stocks. Also, we need to analyze why rates are ascending so fast. It is not normal.

A.F. Thornton