12/15 Bearish. 170 Buying | 515 Selling.
% Stocks Over 50SMA is Bearish. Primary Indicator is Bullish – Caution. 20% Weekly is Bullish – Caution.
The market pulled back sharply as AI-related tech stocks, particularly mega-cap chipmakers like Broadcom and NVIDIA, faced profit-taking after strong earnings but sky-high expectations. Defensive sectors and consumer staples showed relative strength amid rotation, while cyclicals and small/mid caps stumbled.
Technology and communication services led sector declines with notable volatility, while health care and financials held firm. VXX volatility eased slightly after a spike, signaling a moderation in immediate risk-off sentiment.
Investors will focus on Tuesday’s November jobs report and Thursday’s CPI data for clues on Fed policy and market direction amid ongoing sector rotation.
Key Takeaway:
Traders should avoid chasing extended AI and mega-cap tech names given stretched valuations and recent sharp reversals. Focus on high-quality defensive sectors like health care and financials, and watch for follow-through in insurance and defense stocks showing relative strength. Use tight stops and stagger entries on pullbacks near key support levels to manage risk in this cautious, bearish environment.
Watchlist
Continuation: VERA (S1: 49.5, S2: 49.25, S3: 49.0, R1: 50.0, R2: 50.5, R3: 51.5)
Continuation: GLTO (S1: 31.0, S2: 30.5, S3: 30.0, R1: 32.0, R2: 33.0, R3: 34.0)
Anticipation: KNSL (S1: 387.5, S2: 386.5, S3: 385.5, R1: 389.5, R2: 390.0, R3: 396.0)
Anticipation: NOC (S1: 568.5, S2: 567.5, S3: 566.5, R1: 569.5, R2: 571.5, R3: 575.5)