It looked like a straightforward bad news is good news kind of day ahead of the Wall Street open yesterday, until it just wasn't the case whatsoever once the opening ball rang. At the end of last week, US equities made some good headway but so far this week, we're seeing that technical optimism get shunted especially after yesterday's drop:


While market players are busy digesting the BOJ and key US data yesterday, the chart continues to offer up something significant. The attempted break above the 200-day moving average (blue line) and key trendline resistance (white line) from last year's downtrend continues to be an area where dip buyers are struggling to shake off.

If you take a look at the weekly chart, the series of lower highs, lower lows in particular makes it even more daunting and puts to reason why the latest failed breakout above the key resistance levels highlighted above is even more significant.


With the market focus slowly starting to turn towards the Fed policy meeting decision on 1 February, there is still a sense of apprehension in that policymakers might not slow down in terms of aggressiveness for now.

As such, this is perhaps the last thing that equities need as it puts a lid on the optimism to start the new year.