ISM Services slipped to 56.9 from 58.1. While that may seem innocuous, the street was looking for a dip to 57.0.  The ISM discussed supply chain issues and noted lower inventories as a reflection of stronger demand.

• New orders 56.8 from 67.7 (still expansion but a huge decline)
• Business activity 62.4 from 67.2
• Employment 47.9 from 42.1 (best performing component but still in contraction)
• Inventories 45.8 from 52.0
• Supplier deliveries 60.5 from 55.2

ISM Services slipped to 56.9 from 58.1. While that may seem innocuous, the street was looking for a dip to 57.0.  The ISM discussed supply chain issues and noted lower inventories as a reflection of stronger demand.

ISM Services

Profit taking is trigging some panic in Technology and Communication Services.  The sectors are still significantly above key support points.  It’s too early to buy, but a great time to fine tune your list.  There were a ton of names I felt I closed too early, like Michaels Stores (MIK), which is down 25%, that are intriguing. 

Today it’s very important to focus on fundamentals.  The good news is we have strong resistance points to reference in the future. Right now, the more important question is where is support?

XLK

• Key support 115
• 50 day moving average 111.7

XLC

• Key support 60.0
• 50 day moving average 58.6