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Mid-Thursday Technical Update

Bottom line-  Trends intact.  Selloff not too severe to violate uptrend from late June.  Breadth flat.. not all that negative.  Should be buying opportunity unless 2743 is broken in S&P with 2752 being first key support

 

 

90 mins left.. we see Averages trying to stabilize after the selloff from this morning which has given back about half of the prior days gains in S&P.  The NASDAQ has been more serious, down over 1% while DJIA is still positive on the day, being led by MCD, CVX, PG, TRV, VZ and HD all up over 1%-  The declines in STX, LRCX, WDAY, ADSK, WDC, AMAT, ADBE, MELI have been leading NDX lower, all down more than 3% today

Breadth is about flat on the day.. so just as the advances over the last few days lacked conviction..  the decline today also lacks conviction.   But the sector rotation is important to see, and Technology as has been discussed, should be peaking out on an absolute and relative basis near-term, and the FANG gains of days and weeks past could be vulnerable to being at least partially reversed..   Treasury yields spiked down around .04 bps in the US. Which has been detrimental to Financials, erasing much of the morning rally attempt, while Tech is down over 1.3%.  However, Energy is higher by 1.3% and Discretionary, Staples, Utilities and Telecom are also higher.  So 6 sectors are actually positive today.. But Dollar weakness continues and Yields and stocks are moving down in unison as the Yield curve flattens

 

I still expect a rally attempt into next week into FOMC..  but feel it will be very disjointed and not much participation in many sectors.. and breadth should wane into any further rally attempt

The act of regaining today’s losses will embolden traders going into FOMC, but the recent complacency does look to be serious, and the back half of June should be much different than what this first week has brought about. 

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Today’s decline is not too serious.. and has NOT broken the uptrend from late May-  UNDER 2743 would be the first real concern while a break of 2679 has more serious consequences

 

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S&P-  Trend from May will be what to watch to have any sort of conviction that trends are turning lower-  UNDER 2752, and 2743 are two levels to watch which are important