With most bank earnings in the rear view mirror, other than the survival debate for First Republic, the attention has shifted to big tech.

Microsoft and Google kicked things off with a large move in MSFT holding up as the week draws to a close. The street is trying to price in their relentless focus on AI it would seem. Just for kicks I did a search for mentions of “AI” in their call transcript and Q&A: 46. A priority maybe?

Note the stick save from the rolling over pattern on the YTD chart:

Meta was seeing a similar bounce this afternoon after they reported. Regardless it may not be enough to hold up the broader market ahead of what is shaping up to be an earlier “sell in May and go away” than usual. The debt ceiling fiasco may be hastening that early exit, if so can’t say that I blame anyone on that front.

---

SPY has lost the 5/20 EMA upside cross buy signal from late March which is quickly being replaced by the exact opposite. We have also lost the 410 level again after another brief trip above similar to February:

Just about anywhere you look, the charts are rolling over. Volatility has been somewhat artificially suppressed sub 20 due to option activity and that could reverse on a dime as well.

UPS earnings confirmed what many have already assumed, consumers continue to substitute or potentially delay spending on “stuff” while shifting to “services and experiences”. Sticky inflation will do that to you.

We will see if Amazon earnings tomorrow after the bell sing a similar song. More importantly are the cost cutting measures taking hold and how is AWS guidance going forward?

---

Bottom line we are very vulnerable as we tiptoe through earnings season. No real landmines yet to speak of and big tech appears to be calming some nerves this week but make no mistake, the charts are broken.

The charts don’t lie.

Hoping for clear skies and sunshine but planning for rain.