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Third straight day of muted to negative breadth despite QQQ surging another 1% on big-cap Tech strength while 9 of 11 sectors are down. Notable that the breadth bounce we saw in late Nov is now facing challenges this week, though the AAPL-2.88%  breakout and NVDA bounce are important and powerful forces within ^SPX-1.35%  - While the sliding VIX despite cross-asset volatility could be seen as complacent to some, and they're not wrong... when HIGH PERCENTAGE SPX names like AAPL breakout that represent 7% of SPX and 12% of QQQ, you pay attention

^SPX-1.35%  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-2.88%  AMZN-1.49%  META1.45%  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

AAPL-2.88%  pattern very similar to NVDA, but lagging on its breakout- Today's downgrade not having much of an effect and expect this to actually push higher and get above 228 which would be its technical catalyst, which should lead this to quickly challenge its triangle resistance near 233 and then break out back to new highs. Eventual targets lie at 243, then 251. But very constructive pattern here and compelling technical risk/reward.

Fractional decline to kick off the new week in US Equities, but Technology's relative strength is helping this market hold up a bit better than it would without its influence. Financials and Utilities are down 1%, and 10 of 11 sectors are lower, with just Energy up today. TNX is back over 4%, and China's FXI has gapped up again and now trading over $36. This pattern in SPX is not too negative and represents just some minor backing and filling which then should begin to turn higher back to new highs. Key for ^SPX-1.35%  will be 5753 while for S&P Futures that level lies at 5808. Both are important technical catalysts, and expect that Tech should lead on this rally over next couple weeks given the strength in key Tech names like NVDA-2.46%  and AAPL-2.88% . S&P should not undercut 5677 in my view, and should be starting to stabilize today after early weakness.

NVDA-2.46%  pattern is not unlike AAPL-2.88%  and at a combined 10% of SPX, is at least part of the reason for a bit of slowdown in the Tech trade lately. (Both AAPL and NVDA have traded in range-bound symmetrical triangles since July) As seen, this triangle pattern requires a move over 126.50 for a breakout (and this is the likely outcome) and today's rally to multi-day highs has provided a bit of a short-term spark for Technology (While Equal-weighted Tech is just fractionally positive, XLK is up +0.55%, due largely to NVDA, PLTR-1.95% , AMD-5.74% , CRWD-3.02% , and MU-0.51%  outperformance, all of which are higher by more than 2%. NVDA looks appealing here ahead of its breakout, and movement above 126.50 should result in acceleration that leads this back to new highs, technically.

Powell's lack of urgency to cut too quickly has caused some flattening in the yield curve today.. 2 yr yields rose to session highs, along with US Dollar which rose the most vs Yen (+1.0%). Powell said in prepared remarks "Fed doesn't feel like it's in a hurry to cut quickly" and i think it's safe to say that a strong economy where Powell dials in some of the enthuasiasm for rate cuts, largely is good for Stocks, vs the early part of the year, where economic disappointment resulted in strength for Equities. This recent consolidation in stocks over the last week is more bullish than bearish, given the breakouts we've seen in Materials, Discretionary, and Industrials, despite some lagging in Financials and Healthcare. After a 500 point S&P Move in a period of two weeks from 9/6 into 9/19, it's natural for ^SPX-1.35%  to show some consolidation. Moreover, moving sideways is not too big of a deal if key constituent SPX, and QQQ stocks like AAPL-2.88%  are breaking out and showing good strength. This hourly chart shows our 500 point move the 2nd and 3rd week of Sept and the subsequent range-bound position that stocks have moved sideways in since. Above 5830 would cause acceleration higher for S&P Futures (ES-0.67% _F ) and that same area for ^SPX-1.35%  lies at 5764

Many investors fretting about sideways markets of late might take comfort in seeing AAPL-2.88%  break out which is the number 1 component in S&P and QQQ-1.45% . Very constructive move and i expect a coming challenge and break out above prior all-time highs from July near $237.

Markets have reversed minor losses as Fed governor Waller told CNBC that "inflation softening much faster than expected" and "estimates suggest Core PCE running below target. " Also- " If data comes in soft, more willing to cut aggressively" and "Would consider 50 bp cut again if job market worsens" Stocks bounced as Treasuries also rallied with yields pulling back towards lows of the day. The yield curve flattened a bit but this might prove short-lived given the 183 billion in front end loaded Treasury supply coming next week. Overall given the minor consolidation post breakout of this SPX triangle heading into the last 3 hours of a Triple witching Friday expiration with major reshuffling of S&P Dow indices and FTSE Russell on deck for the close, (and AAPL-2.88%  set to be the main beneficiary along with Technology and set to be the beneficiary of $40 billion of net buying), i expect rallies likely persist into today's close and into next week. SPX daily chart shown below with the breakout of the Triangle pattern which is clearly a bullish development. 5733.57 was yesterday's highs, and above should fuel a move to 5815

Heading into Europe's close, we see a moderate rally in US Equities that has been largely disguised by weakness in AAPL-2.88%  which is falling by the most it has in a month. While Equal-weighted S&P 500 did rise to a record high today early in trading before giving back some of these gains, 10 of 11 sectors are higher today on an Equal-weighted basis, with only Technology being dragged down. This Tech weakness isn't as apparent when eyeing RSPT-1.86%  which is just lower by -0.26% but XLK-2.13%  is down -0.67% as AAPL along with SKYW-0.44% , QRVO-1.14%  MU-0.51% , TER-2.36% , and AVGO-2.60%  are all down more than 3%. Thus, Semiconductors are down, but the broader market is acting fine, with Financials, Energy, REITS and Utilities all higher by more than +0.50% and even Healthcare is up by +0.47%. Overall, it's important to recognize that the US stock market is made up by more than just AAPL-2.88% , but Technology's negative performance today is dragging down the major US Benchmark indices like SPX and NASDAQ, while DJIA is positive, DJ Transportation Avg is positive and RSP-1.38%  is higher by over +0.30%.

I'll address this in tonight's piece, but the AAPL chart to me does NOT yet look to be "Out of the Woods", so to speak. This would challenge the idea that a move straight higher can happen without another move to new weekly lows. Overall, Above 221 is bullish for AAPL and helps its trend. Any decline back under 216, however, should lead down to 210-212 which then should represent a better area to buy dips. I'm open to all outcomes, but the churning here in AAPL-2.88%  makes its hourly chart seem less than ideal, structurally speaking, and SPX has not yet broken out and also churning near resistance.. Overall, any move back under AAPL might lead SPX back under 5430, and both would lead to minor new lows, and would necessitate introducing a couple of new scenarios on trend, which i'll do tonight. Simply stated, given that my cycle composite chart (that i showed in last night's report) bottoms in August, then a move under Thursday's lows in AAPL and SPX would mean that any bounce into FOMC would be sold and additional downside could happen into early August ahead of a larger rally. (Note, this hasn't happened, yet but i'll run through the scenarios tonight for means of risk management, for those who care.)