Monday brought a rebound in the earlier leaders. Technology, consumer discretionary and industrials led the advance, while some of the defensive businesses that had been holding up better took a pause.
That fits the possibility of an upside surprise discussed over the weekend. Buying returned to the weaker areas while equal-weight stocks also continued to edge higher.
Market Commentary
Friday brought a pullback in some of the areas that had been holding up better. Equal-weight stocks and Treasuries gave back part of Thursday's gains, while semiconductors managed a small rebound.
Overall, Friday brought little change to the setups in stocks, Treasuries, crypto and the Dollar Index.
Gold extended Thursday’s downside breakout.
The divergence we have been following became more pronounced over the past two sessions. RSP continued higher and reached the target area discussed last week, while Thursday's selling reversed the Nasdaq's recovery.
Treasuries also advanced into their upside target area.
Monday was a typical market Monday: still nursing a hangover and searching for direction.
We saw a little of the relief rally discussed previously, but trading remained within Thursday and Friday’s combined range.
Tuesday brought a more useful development: the Nasdaq held Monday's rebound while equal-weight stocks and small caps advanced.
Friday was more active than I had expected, and the selling put Thursday's recovery into perspective. The Nasdaq came under renewed pressure, while small caps gave back their rebound.
Equal-weight stocks held up considerably better, and Treasuries kept most of their gains.
Topics: Market Update
Symbols