7/23 Cautiously Bullish. 500 Buying | 100 Selling.
% Stocks Over 50SMA is Bullish – Caution. Primary Indicator is Neutral. 20% Weekly is Bullish.
The market closed mixed after a heavy earnings day, with mega-cap tech and defense stocks under pressure while small- and mid-caps led gains. Rotation into healthcare, real estate, utilities, and materials supported the broader advance, despite weakness in semiconductors and some blue-chip names. Treasury yields declined modestly ahead of a $13B 20-year bond auction, keeping fixed income supportive of equities.
Healthcare (+1.9%) led sectors on strong earnings, notably IQVIA and Medpace, while homebuilders D.R. Horton and PulteGroup rallied sharply, signaling resilience in housing despite elevated mortgage rates. Technology remains cautious with the Nasdaq down 0.4%, but selective strength in industrials and materials suggests pockets of momentum. Volatility remains subdued as VXX shows minimal movement, reflecting investor complacency amid mixed signals.
Tomorrow’s key catalyst is the $13 billion 20-year Treasury bond reopening at 1pm ET, with limited new economic data expected. Earnings from major names including AVY, KO, DHI, DHR, GM, and LMT may further influence sector rotation.
Key Takeaway:
Swing traders should focus on stocks showing relative strength in healthcare, industrials, and homebuilding amid ongoing rotation away from mega-cap tech. Use support near key moving averages and watch for volume-confirmed breakouts in these sectors. Avoid heavy exposure to semiconductor and defense stocks showing earnings-related weakness until clearer momentum develops. Manage risk with tight stops below recent support levels given the cautious overall tone.
Watchlist
Continuation: LII (S1: 613, S2: 615, S3: 617, R1: 620, R2: 621, R3: 625)
Anticipation: NVTS (S1: 8.0, S2: 8.2, S3: 8.3, R1: 8.65, R2: 8.8, R3: 9.0)