Last night, we looked at the sardonic bull wearing a crown with 5 distinct warning signals.

To review, the first one was certainly Semiconductors (SMH). Today, not only did SMH confirm the warning phase, it also broke the 200 DMA, hence, entered an unconfirmed distribution phase.

Furthermore, should SMH’s price remain below 103.75 level by the end of the week, it will close under the 50-week MA for the first time since May 2016.

The second warning concerned the four indices inability to clear their overhead fast-moving averages.

Today, the Dow (DIA) did clear the fast, overhead MA. It even traded up to 261.77, the recent high., It closed slightly green.

Meanwhile, the S&P 500, with a late-day rally, tried to clear the overhead fast MA. It could not close above the MA, though did manage to close a touch green.

Neither the Russell’s not Nasdaq could bounce enough to clear their overhead resistance levels. Both closed red.

Yet, please note that QQQ had an inside trading day. That pause in the action could turn out to be very informative, depending upon the way the trading range reconciles.

The 3rd warning was about the rising interest rates and firming dollar.

Today, rates weakened a little bit. The dollar declined with UUP (the dollar bull ETF) entering an unconfirmed warning phase.

The 4th warning was the rise of crude oil prices. Today, oil prices rose further.

Finally, our 5th warning represented emerging markets. Today, EEM (the ETF) rallied off them multi-year low it made yesterday. It also bounced off a key monthly moving average.

That means it must hold this week’s low, which could turn out a low-risk buy opportunity. More importantly, if emerging markets bottomed, then the conversation turns back to the subject of tonight’s Daily – Can the metals rise from the grave?

It is important to note when 2 of the 5 warnings shift to more positive.

What that could imply, is that the money is rotating out of technology, and the financials and looking for fresh opportunities in areas that were beat up.