"Bull market" sudden turn: BTIG analyst warns of collapse in breadth of US stocks, financial sector sends out danger signal.

BTIG analyst Jonathan Krinsky shifted to a more cautious stance on Thursday, warning that the deteriorating market breadth and weakness in the financial sector have become difficult to ignore. Krinsky, who had maintained an optimistic view since the escalation of tensions in the Middle East, noted that his confidence in the bullish outlook has "rapidly declined" as market conditions worsen. In a report to clients, Krinsky wrote, "As market breadth collapses, our confidence and patience in this view quickly diminish. Currently, only 50% of the components of the S&P 500 index are still above their 200-day moving average." It is worth mentioning that earlier this month, Krinsky optimistically stated, "The market bottom has been confirmed, it is now time to go on the offensive." At the beginning of this month, the S&P 500 index surpassed 6800 points. Krinsky pointed out in a report to clients at the time that the index had broken through a key technical level, indicating that even if there were subsequent pullbacks, there was a high probability of a quick rebound, creating a "bear trap" for those betting on a decline. Krinsky pointed out several worrisome signals. 1) Key support levels: The range of 6550-6600 points in the S&P 500 index forms a key support level, where the region coincides with the rising 200-day moving average and the lows of October and November last year. If the index closes below 6550 points, it may indicate the formation of an important top and could further decline to around 6000 points. At the close of the US stock market on Thursday, the S&P 500 index was at 6672.62 points. 2) Weakness in the financial sector: Only 42% of the components in the financial sector are above their 200-day moving average, and the sector's average is approaching a downward shift. Krinsky noted that the financial sector is the second largest sector after the technology sector, making its weakness particularly noteworthy. 3) Widening credit spreads: Investment-grade credit default swap (CDS) spreads have hit a new high, exceeding levels from last October - when the S&P 500 index was about 100 points lower than the current level. 4) Pressure from oil prices: Krinsky pointed out that oil prices are nearing $100 per barrel again, indicating that geopolitical tensions are unlikely to quickly reverse these gains. 5) Fragility in the semiconductor sector: The semiconductor sector is still weak, with the VanEck Semiconductor ETF (SMH) appearing to be forming a "lower high" and a small top formation. Krinsky stated, "While there is always the possibility of some positive news emerging at any time, the trend in the oil market suggests that this situation may persist for some time."