Wednesday was a tough day for mega-cap indices, especially those with a heavy Information Technology component. Semiconductors were slammed again and it looks like the latest rally off the lows since April 19 is complete. The Nasdaq dropped 2.5%, the Nasdaq 100 (QQQ) lost 2.7%, and the S&P 500, S&P 100, and S&P 400 all fell between 1% and 1.3%. Small-caps outperformed once again, with the Russell 2000 off only 0.7% and the S&P SmallCap 600 down only a fraction. Semiconductor indices all plunged 6% or more. The iShares Semi ETF (SOXX) fell very close to its low from the latter part of June and lost its 21-day exponential average for the first time in three months. The ETF did not quite reach its 50-day average, but the major losses were accompanied by very heavy volume. The 5- and 13-day moving average crossover almost reversed its bullish cross from early May. The VanEck Semi ETF (SMH) did see a minor 5/13 bearish cross, as did the DJ U.S. Semi Index. Since June 20, the semis have generated five distribution days (big losses on an increase in volume or above-average volume). A cluster like that is certainly a warning of an intermediate-term top. We have also seen five or six distribution days on the QQQ since June 20. Renewable Energy, Electronic Equipment, and Electrical Components & Equipment also hurt Information Technology. Consumer Discretionary (-1.7%), Communication Services (-1.5%), and Industrials (-1.1%) also had tough days. Consumer Staples led with a 1.3% gain, Energy was up 1%, and Financial and Real Estate rose 0.7%. Buckle your seat belts, it's getting stormy out there. (Mark Arbeter, CMT)

Bank of America is one of the largest financial institutions in the United States, with more than $3.0 trillion in assets. It is organized into four major segments: consumer banking, global wealth and investment management, global banking, and global markets. Bank of America's consumer-facing lines of business include its network of branches and deposit-gathering operations, retail lending products, credit and debit cards, and small-business services. The company's Merrill Lynch operations provide brokerage and wealth-management services, as does its private bank. Wholesale lines of business include investment banking, corporate and commercial real estate lending, and capital markets operations. Bank of America has operations in several countries but is primarily US-focused.

Bank of America is one of the largest financial institutions in the United States, with more than $3.0 trillion in assets. It is organized into four major segments: consumer banking, global wealth and investment management, global banking, and global markets. Bank of America's consumer-facing lines of business include its network of branches and deposit-gathering operations, retail lending products, credit and debit cards, and small-business services. The company's Merrill Lynch operations provide brokerage and wealth-management services, as does its private bank. Wholesale lines of business include investment banking, corporate and commercial real estate lending, and capital markets operations. Bank of America has operations in several countries but is primarily US-focused.

The Dow and the Russell are flying today. The Nasdaq is lower. This suggests the rotation out of big techs that has been discussed in the last few weeks is continuing. Wall Street is upbeat on the continued evidence in deal-making. Also, Fed Chairman Powell suggested ever-so-slightly yesterday that a rate cut might be in view. For the first time in two years, he implied that the Fed might not stick to its 2% target for inflation if the employment sector weakens too much and needs a boost.