Into mid-day, we’ve seen equities extend off the lows yet again after holding MAKE-OR-BREAK levels of support and Tech leading today seems to be at least a temporary positive.
We haven’t seen enough to think we’re past any sort of window of weakness.. ie that Tech is in the All-clear. But certainly a good sign for Tech to have held May lows (XLK) and now attempting to turn back up. This will continue to be monitored closely. For now, its right to still lean long for Equities unless S&P FUTURES breach 2400 with thoughts that a push back higher CAN occur in the near-term.
Outside of equities. Treasury yields getting close to near-term resistance after a fierce rally in the last couple weeks.. and Yield curves have steepened out dramatically both in 2s/10s and some evidence finally of 10s/30s turning back higher- While overdone. Certainly a continued breath of fresh air to Financials- Meanwhile Commodities have turned down sharply again with Gold and Silver breaking down.. Silver to its lowest since early last year. And Crude also following through on its early week reversal. While sentiment starting to turn more negative on commodities, technically today’s break looks to extend into next week and should NOT be an immediate buying oppty for Crude, nor for Gold/silver. The Dollar meanwhile is breaking out vs the Japanese Yen and something which typically has a high positive correlation to SPX while a high negative correlation to Gold- Into next week, a continued bounce out of Technology is a necessity given the damage done.
Breadth today is a lackluster 3/2 positive so there remains the need for a strong broadbased rebound at a time when buying up seems to have dried up a bit. But still premature to be SHORT the market.. and for those bearish, simply have to take negative bets in Energy and Retail that are tactical. While favoring strength in Financials, Healthcare and industrials, with XLI likely to push back up to new highs in the next 1-2 weeks. Have a nice weekend.