10/16 Cautiously Bullish. 515 Buying | 180 Selling.
% Stocks Over 50SMA is Bullish. Primary Indicator is Bullish. 20% Weekly is Bullish – Caution.
The market showed resilience with modest gains in major averages, led by tech and mega-cap strength despite fading intraday momentum. Small caps outperformed, while defensive sectors like real estate and utilities continued to run. Volatility remains subdued as VXX normalized after an early spike, reflecting cautious investor optimism amid ongoing trade tension headlines and steady Fed Beige Book commentary.
Technology and communication services sectors led with strong chipmaker earnings fueling momentum, while industrials and materials lagged on defensive rotation. Precious metals and crypto-related names showed selective strength, signaling some risk-off hedging alongside risk appetite.
Tomorrow’s catalyst focus includes September PPI, Retail Sales, and the Philadelphia Fed survey, all critical for gauging inflation and economic momentum.
Key Takeaway:
Traders should focus on tech and small/mid-cap biotech continuation setups with strong volume support, while maintaining stops near key support levels given the cautious market tone. Avoid chasing fading momentum names late in the session and watch for early dips to enter continuation plays. Defensive sectors and gold-related plays offer hedging opportunities if risk-off spikes re-emerge.
Watchlist
Continuation: RXRX (S1: 6.5, S2: 6.3, S3: 6.0, R1: 6.8, R2: 7.0, R3: 7.5)
Anticipation: GLD (S1: 386.5, S2: 386.0, S3: 385.0, R1: 387.5, R2: 388.5, R3: 390.5)