Tech Leads the Rebound as Markets Test a Crossroads

E-mini S&P (March) / E-mini NQ (March)

S&P, yesterday’s close: Settled at 6983.25, up 30.50

NQ, yesterday’s close: Settled at 25,354.00, up 190.75

E-mini S&P and E-mini NQ futures picked up right where they left off Friday. However, the strength was bifurcated; although tech continued to rebound, software (IGV) gained 3.15% and semis (SMH) 1.24%, led by MSFT, ORCL, PLTR, AVGO, and NVDA, wind certainly came out of staples, while financials and healthcare also struggled.

KO is down 4% this morning after missing revenue targets and forecasting underwhelming growth due to demand concerns. Retail Sales data this morning was light with both headline and Core at unchanged m/m, versus expectations of +0.4% and +0.3%, respectively. The Import Index was in line at +0.1% m/m, but the Export Index was firmer at +0.3% m/m versus +0.1%. Finally, the Employment Cost Index was soft at +0.7% q/q versus +0.8%. Also, the Atlanta Fed GDPNow is due at 10:30 am CT.

Price action settled in overnight, following the two-day rebound, and this sets the stage for either the bulls to step in and take the E-min S&P higher to test major three-star resistance at the record closing high, or the sellers to back and fill. We have strong support at 6965.75 all the way down to major three-star support aligning with yesterday’s opening bell low at 6921.75-6925.25. We like the idea of buying on a pullback, however, a break and close below major three-star support at…