Technology has achieved a minor breakout ahead of Earnings Array ( [cookie] => 24A6F9F7-FF1D-48EF-9CEE-67A01E97FA6B [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 1 [max_usage_crypto] => 1 [lock] => 1 [message] => [error] => [active_member] => 1 [subscriber] => 0 [role] => fsi_macro [visitor_id] => 593601 [reason] => [method] => ) 1
Equity trends remain bullish but fragile as we near the end of October. Stocks, Treasury yields, and the US Dollar look to all be close to beginning a corrective pullback, which likely starts in early November but should prove short-lived and not the start of a larger decline. Minor pullback attempts this week have failed to do much damage but should ultimately result in 5-7% declines in US Equities for the month of November. While intermediate-term bullish thesis remains very much intact, it’s doubtful that US Equities will continue to push up into and post-election without any consolidation. Risk/reward seems poor in the short run, and SPX seems unlikely to exceed 6000 right away but could find initial resistance near 5900-5935. Meanwhile, QQQ should find resistance at 503-505.
Given that 5 out of 7 of the “Magnificent 7” stocks report earnings this week, or roughly 12 trillion dollars in market capitalization (Roughly one-fourth of the S&P 500’s entire capitalization of around $49 trillion), this week’s results certainly might have huge implications for Technology and for US equities.
If charts are any guide, “Tech” has begun to look a bit better ahead of this week’s results. As I’ll show in a couple charts within this report, both the “Magnificent 7” have broken out of resistance, along with relative charts of Tech vs. SPX.
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