9/24 Cautiously Bullish. 230 Buying | 190 Selling.
% Stocks Over 50SMA is Bearish – Overbought. Primary Indicator is Bullish. 20% Weekly is Neutral.
Mega-cap pressure drags indices off record intraday highs amid valuation concerns, despite solid energy sector gains and steady industrials. Defensive profit-taking in tech and consumer discretionary contrasts with strength in defense, coal, and select semiconductors post-earnings. Crude oil rallied nearly 2%, supporting energy ETFs, while volatility (VXX) remains subdued, signaling moderate risk appetite.
Defense and industrial sectors show late-day accumulation with volume confirming momentum, led by KTOS, LHX, and GE. Semiconductor MU’s after-hours surge signals event-driven upside, while space/biotech names like PL and IMTX build steadily. Consumer discretionary and mega-cap tech remain soft, cautioning against chasing weakness.
Watch for MBA Mortgage Applications and August New Home Sales data tomorrow; also note the $70B 5-year note auction which may influence fixed income and equity flows.
Key Takeaway:
Focus on swing setups in defense, industrials, and energy sectors where momentum and volume confirm strength. Avoid tech and mega-cap discretionary names showing distribution and profit-taking. Use tight stops on momentum plays like MU and KTOS, and watch for confirmation of support levels before adding exposure. Manage risk given overbought conditions and mixed market breadth.
Watchlist
Continuation: KTOS (S1: 82.5, S2: 82.5, S3: 82.0, R1: 84.0, R2: 84.5, R3: 85.0)
Anticipation: APLD (S1: 24.0, S2: 23.5, S3: 23.0, R1: 24.5, R2: 25.0, R3: 25.5)