S&P Dips Again + A Number of Individual Trade Setups

Are we seeing a rotation out of tech?

Technical Edge — 

• NYSE Breadth: 53% Upside Volume 

• Advance/Decline: 45% Advance 

• VIX: ~$16.75

So we’ve got a whiff from NFLX and now a whiff from TSLA. Given the importance that TSLA has played in the recent rally, having a bearish post-earnings response isn’t the best-case scenario for bulls. 

We’ll see how it opens. Yesterday we noted some of the bearish divergence we were seeing in tech combined with how strength faded on Tuesday, this group could need some more time. 

On the flip side, very notable strength is starting to show up in defensive stocks — as we mentioned last week, MCD, WMT, KO, PEP, PG, XLP — as well as healthcare names — like CAH, ABBV, LLY, ABT, XLV, etc. 

S&P 500 — ES 

The 10-day ema was strong support yesterday and Wednesday morning’s dip was gobbled up. Look at the last three closes: 4176.75, 4180, 4178.50. Clearly a key zone. 

• Key Pivot: 4175 to 4180. 

• Upside Levels: 4200, 4217-25, 4240-45

• Downside levels: 4140-4150 + 10-day, 4115, 4095-4100

SPY