10/6 Cautiously Bullish. 400 Buying | 150 Selling.
% Stocks Over 50SMA is Bullish. Primary Indicator is Bullish. 20% Weekly is Bullish – Extreme Caution.
The market extended record highs with broad strength across seven S&P 500 sectors despite late-day weakness in mega-cap tech weighing on the Nasdaq. Utilities (+1.2%) and health care (+1.1%) led gains, while consumer discretionary and communication services lagged due to mega-cap softness. Small- and mid-caps advanced, highlighting rotation away from largest names. Elevated volatility (VXX) and cautious price action near key SPY (668.50 support) and QQQ (602 support) levels suggest traders remain watchful amid mixed momentum. Fed officials continue to weigh economic data amid the government shutdown, with no major catalysts Monday.
Sector rotation favors lithium/battery miners and biotech, which showed late-day accumulation and range expansion, while managed care and large-cap tech softened. Crypto and AI/data center names remain active, with crypto-linked stocks like COIN and MSTR showing strong momentum. Industrial and defense sectors are steady but lack breakout strength.
Upcoming catalyst: No major economic data Monday; focus shifts to Tuesday’s August Trade Balance and Consumer Credit reports, plus a $58B 3-year Treasury auction.
Key Takeaway:
Focus on momentum names in lithium (LITM, SLI) and biotech (ACIU, ATOM) for continuation setups, using intraday support retests and volume confirmation. Avoid chasing weak mega-cap tech and managed care stocks showing late-session supply. Watch SPY 668.50 and QQQ 602 supports for signs of market conviction before adding risk. Position sizing should reflect elevated volatility and potential for short-term pullbacks.
Watchlist
Continuation: LITM (S1: 4.95, S2: 4.90, S3: 4.75, R1: 5.05, R2: 5.30, R3: 5.50)
Anticipation: COIN (S1: 376.5, S2: 372.5, S3: 370.5, R1: 381.0, R2: 385.0, R3: 392.0)