When the chips are down, chips and other Technology (XLK) names have come to the rescue, and yesterday was no exception.

Super Micro Computer (SMCI) led the way, followed by Arista Networks (ANET), Teradyne Inc (TER), Lam Research (LRCX), and Microchip Technology (MCHP) among the top ten movers.

Factors & Breadth

Low volume took the biggest hit, which may be a positive sign, as it has been the hideout of choice over the past couple of weeks.

Nobody expects a V-shaped rebound, but that was also the case in the spring and summer of 2020. If it happens, growth and momentum will set the pace.

The market breadth was not impressive at all. Decliners outnumbered advancers, and there were more than 2,700 new lows on the New York Stock Exchange (NYSE) and the NASDAQ Composite, compared to only 30 new highs.

The surge in ‘up’ volume on the NASDAQ underscored the fact that there is tire-kicking in big Tech momentum names.

Market Breadth	NYSE	NASDAQ
Advancers	507	1,319
Decliners	2,329	3,173
New Highs	1	29
New Lows	1,155	1,584
Up Volume	2.19 billion	5.07 billion
Down Volume	5.05 billion	6.12 billion

Hoping the Leaders Can Lead Again

In addition to chips and “Mag Seven” names, big banks made noticeable rebounds.

At one point yesterday, the three-day slide was -10.7%, just missing the top ten since 1950. The good news is that the market often experiences substantial growth in the years following.

It's clear the market will remain vulnerable while the tariff demand persists, but it’s also clear there are great bargains out there.

Today’s Session

A subscriber asked about a potential death cross for the S&P 500, which has happened ahead of major moves lower, but nothing materialized after.

I’m not sure if it happens, but we will be on the lookout.

Always watching the ten-year yield which spiked yesterday, opening the door for a rift of ominous guessing including a LTCM moment. Again, we are watching closely but don’t see that parallel.

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