The market opened and tried to extend its gains. Tesla had just reported its earnings and people were optimistically buying it, getting share prices up to 1689. At the same time, some reporters were claiming that the earnings numbers were manipulated. This, along with the extinguished buying on the open, saw the stock turn around and head south.
At the same time, AAPL was falling. Despite Tesla and AAPL falling, the market tried to stay near the unchanged line. There was a lot of underlying strength in the overall market to hold up under the pressure of both of these big names falling.
It was not until the pressure of AAPL falling more than -$7 and TSLA down -$15 at 11am Chicago time that the SPX just started to capitulate. As the day went on, AAPL continued its descent as analysts came out criticizing the company, and AAPL announced it had another delay in release of a 5G phone.
One needs to keep in mind that AMZN, AAPL and MSFT are so large that these three companies combined account for $5 trillion in market cap. That is larger than the economy of Japan or Germany. When one of these names gets hit hard, it is going to take the market lower.
At the lows, AAPL was down more than $20, taking the SPX below its support of 3233, and playing with 3222. The rest of the day, the SPX floated between 3222 and the previous support line of 3233, a $10-point channel.
In the MORNING COFFEE report for the last 3 weeks, I have been pretty hot with my preconditions. Yesterday, I got it wrong, though I did warn the advances higher would not be straight lines anymore.