Talk about getting walloped!

My goodness, last Friday, thatwas  capitulation, and yet major indices closed well off their intraday lows.  Still, market breadth underscores the depth of damage, as we got some real panic, which has been missing from recent orderly selling.

Technical View

We began the week looking to breakout through the 200-day moving average and finished the week hoping to hold the 50-day moving average.

What stands out on the chart is the spike in volume. Friday’s selling was serious stuff. The kind of washout Wall Street pros have been clamoring for months.

I suspect buying into the close were those nimble pros looking for calmer heads to prevail after the weekend. But if that doesn’t happen, we must consider where the S&P 500 could land.

• First Support 3,750
• Second Support 3,650

Below there, the chorus will call for retesting the 2022 low. I don’t think this will happen, but this is as vulnerable as the market has been all year long from an emotional point of view. On the upside, the 200-day moving average has eased down to 4,027.

Today’s Session

Shares of Tesla (TSLA) are ticking higher in pre-market hours in anticipation of CEO `Elon Musk stepping back from Twitter.  Over the weekend, Musk put out a poll asking if he should step down as the head of Twitter.  Fifty-eight percent of the respondents said yes. TSLA shares have plunged 58% since Musk took a stake in Twitter in early April.

On the economic front, NAHB housing market index to be released at 10am E.T., kicking off a big week for housing data.

Futures are still undecided on which direction to take.