The main market index of the New York Stock Exchange continues to decline earlier this week under the weight of bad news including micro-economic. Even if investors did not expect good publications, earnings season started badly for the United States to the point of reviving concern about the economic recovery in the country and the outlook of large companies. Meanwhile the FOMC statement and the earnings of Apple will be release this week. The company is a real barometer for the overall market. Investors continued to take profits after the rally of recent weeks.

The bullish trend of recent weeks seems to be coming gradually to an end. The quarterly earnings of large U.S. companies are currently not in line with expectations. Investors are concerned as this period is the opportunity for public companies to provide accurate predictions regarding next year. Overall, the numbers stand without relief, many companies such as Caterpillar, 3M or Dupont are warning that the economic environment will be more difficult than expected. Apple will present its quarterly earnings Thursday night; It may have a strong influence on the overall trend for the high-tech sector which is currently the one that was most disappointing. Furthermore IBM and Microsoft, Intel and Google have all been sanctioned by investors.

The overall climate is also penalized by Europe where Spain is moving closer to a bailout. The Moody's decision to downgrade the rating of five Spanish regions (Andalusia, Extremadura, Castile-La Mancha, Catalonia and Murcia)by two notches, did not reassured financial operators. The increase of nearly 25% of U.S. volatility index in recent days reflects the increasing nervousness and decreasing of US investors. Some caution is setting particularly in a context of relatively lackluster quarterly earnings. Consequently, will the Fed be able again to reassure U.S. investors ? There are rumors that it might increase the size of its quantitative easing program.

Technically, the dynamics of the SP500 is now bearish in daily data below 1440 points which also refers to the 20-day moving average. A break below the blue rising wedge on the daily chart argues for a strong bearish correction. Any rebound towards 1425/1450 will be an opportunity to take short positions to target 1400 and 1370 points. This bearish movement may be traded using E-mini SP500 FUTURE (code: ESXXXX) on the futures market CME E-mini.