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^SPX-1.50%  has shown more damage and has undercut last week's lows. However, here also, price has not shown sufficient deterioration yet to think that the index has peaked out. There very well could be a relief rally into US Election given AAPL-2.41%  AMZN-1.44%  META0.94%  earnings on deck which provide a bounce, but one that ultimately proves short-lived around mid-November. Ideally from an Elliott-wave perspective, SPX could make a minor new high into November and then began a decline into late November, technically. For now, as this chart shows, there looks to be ample technical support, making this morning's decline a probable good risk/reward for traders to bottom today or tomorrow for a push back higher, which might be led by large-cap Technology

To all, stocks have been under pressure for much of the past month, stemming from fears of rising inflation and amplified by geopolitical concerns. While stocks have fallen the past two days, we believe a lot of bad news has been priced in as of last Friday, so we think last Friday’s lows will hold.

• Today’s GDP report raises concerns about “stagflation” because of softer GDP and higher price index. But this is a superficial take, in our view.
• GDP is softer due to inventory and trade, not due to consumption
• Core Price above consensus is due to constant revisions and our long standing view is that inflation is propped up by auto insurance and shelter

The natural question is when will a catalyst emerge? We think it has been earnings mostly. The META0.94%  miss shows markets did price in high expectations for that stock. But it was also up 40% YTD. We have been speaking about 3 things this week:

• many signs of extreme pessimism like p/c >1.0, forward inflation to 2022 highs etc
• market bottoms are “dangerous” because many liquidate indiscriminately, this is on ample display this week
• bottoms are “two steps forward, one step back”

Markets hyperfocused on data points. But the full year equity picture is supported by:

• - strengthening economy
• - pent-up demand by biz and consumers due to tight money over last few years
• - inflation is stabilizing
• - $6t of cash on sidelines

Monthly META0.94%  charts show the reason for optimism and why a brief stalling out has not been detrimental at all to the current momentum. Thus, while many investors might fret over the downturn in daily and/or weekly MACD, this kind of slowdown and negative crossover often occurs with a stalling out after a lengthy advance. However as we see, after a hugely parabolic advance, there really has been no material damage, making it literally impossible to attempt to "call a top" technically speaking. Monthly MACD remains quite bullish and sloping higher and this should allow for META"s recent churning to be resolved higher, not lower, in my view. I continue to endorse META technically speaking and find this slowdown in momentum and minor 7% pullback off all-time highs to translate into an attractive risk/reward for the stock

Ahead of META0.94%  earnings, i thought i'd share some recent Technical thoughts. This has been largely range-bound for two months, but it's consolidation does not equate to a sell signal technically despite momentum having waned as a result of its sideways churning since February. At a price of $489, i view this intra-day weakness to actually make META appealing as the stock would need to close down under $473.40 on a close to have much effect in causing more near-term weakness and postponing the advance. Most times, it's correct to view lengthy consolidations following a steep advance as being the "Pause that refreshes" and at present has certainly acted to alleviate some of the recently overbought conditions in momentum. Overall, i suspect that any further weakness should be contained at 473 before this turns higher to exceed $530 on its way to 600. Given that META lies just 7% off all-time highs achieved last month, this is insignificant, technically speaking. Bottom line, i expect this two-month consolidation to be resolved higher, and META remains one of the top stocks within Communications/Technology

Today's early weakness still shows a choppy picture since late March and SPX and DJIA failed to make similar progress as NASDAQ did yesterday. However, quarterly EPS from the "Magnificent Seven" is poised to rise 38% y/y vs. profits declining -2% for the rest of the SPX (Per Bloomberg Intelligence) Thus, i firmly believe (and Technology charts of AAPL-2.41%  GOOGL-0.94%  META0.94%  help to back this up) that Tech earnings can save the market yet again. However in the short run, until 5212 can be exceeded in ^SPX-1.50%  cash index, the short-term pattern remains negative and suggests an upcoming test of SPX-5100- It's worth nothing that 5100 represents an area that is very attractive as risk/reward support technically

Today is showing an extraordinary amount of divergence that's been quite rare in recent months, if not years- Nasdaq is up 1.1% and SPX higher by 0.63%, but these indices are diverging substantially from actual market performance- meaning 9 out of 11 sectors are lower on the day and breadth is hugely bearish, by nearly 3/1 based on advance/decline as well as volume. Technology as a sector in Equal-weighted terms is actually down on the day (RSPT-1.95%  -0.18%) while XLK-2.14%  and XLY-0.98%  are higher by +0.65% and +0.80% respectively. Thus, we're seeing a huge amount of outperformance by Large-Cap Technology that's been rare for even recent months. Technically for those who don't study internals, it appears like the market's having a great day. However, it's often a warning sign if most stocks are falling, but a select few (META0.94%  +20% today alone, AMZN +7%) are carrying markets while the broader market suffers. Since most investors follow and are benchmarked to the SPX, it's right to study SPX technicals. Yet, this large-cap divergence is growing more extreme, and it's just worth pointing this out on a rainy Friday- Have a good weekend All!

Today'sQQQ-1.57%  bounce has indeed broken out of its downtrend from late July, and weak economic data this am could be a precursor of the kind of sector rotation that results as Treasury yields begin to weaken- Technology an overwhelming outperformer early on, higher by 1.37% in equal-weighted terms, while XLK up by +1.7%- Communication Svcs also showing excellent relative strength on the heels ofNFLX-4.26% META0.94%  andGOOGL-0.94%  all higher by 2%+ FANG FANG FANG!!! SPX requires a move above 4440- DJIA meanwhile lagging, but this is largely NKE-0.13%  related which is down 3.94%-