Wow, yesterday was an extraordinary session. I wasn’t sure why the market stumbled out of the gate, but it was clear from the early part of trading that Technology (XLK) stocks had a bid, but the rest of the market, not so much.

Bullish Engulfing Pattern

https://www.investopedia.com/terms/o/outsidereversal.asp

The S&P 500 tumbled below yesterday’s intra-day low and closed about yesterday's intra-day high. The last time this happened was in June and the market took off like a rocket afterward.

• S&P 500: Down 90 points
• S&P 500: Up 148 points 

Panic Buying

Another way to put the session in perspective is a one-day chart. We are seeing this more often, copious amounts of buying into the close.  There are lots of would-be buyers on the sidelines champing at the bit. They don’t want to pick the bottom per se, but they don’t want to miss too much of the next bounce.

Market Breadth

Market breadth was bullish, but what stands out is up volume to down volume in the NASDAQ Composite.

It was all about Technology. 

Market Breadth	NYSE	NASDAQ
Advancers	1,581	2,345
Decliners	1,175	1,881
New Highs	178	139
New Lows	99	143
Up Volume	2.32 billion	4.37 billion
Down Volume	1.45 billion	1.73 billion

Chips Bounce

The chip trade, including the power angle, dominated yesterday’s session (solar stocks bounced post-debate) after Nvidia (NVDA) blew them away at a Goldman Sachs Conference.

Tech Sector

The XLK has held at the 200-day moving average but closed at its 50-day moving average. The volume wasn't as impressive as the move because the Artificial Intelligence (AI) idea is not lifting all boats and might be sinking Software as a Service (SaaS) and other niches in the software spectrum.

Fed Watch

Sticky inflation, which continues to erode household purchasing power, might mean a 25-basis points (bps) cut instead of 50-bps, but those same households are not getting any help from higher rates.

Today’s session

PPI for August year-to-year mostly came in as expected, but core was +0.3% m/m from July while the Street was looking for +0.2%.

Services powered final demand.

The market seems unsure as the release took some scratch out of the preopening action.

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