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Today's early weakness is reaching multi-day lows for the first time since early November though market breadth today is positive by 3/2 as seven sectors are positive out of 11, with Materials and Healthcare up more than 1%. The decline in big-cap Tech however is what many investors are concentrating on and FI-2.35%  AMD-5.43%  PANW-0.47%  NVDA-2.83%  PLTR-2.57%  are all down more than -2.75%. An end of day finish at multi-day lows, particularly if breadth gets worse would make the case for a mild selloff which might last into FOMC but one which should provide buying opportunities. Oddly enough, today's positive breadth on negative SPX price action is nearly the opposite of what happened all last week when prices rose while breadth was negative. Initial support levels for ^SPX-1.59%  lie near 6042, then 6017

Time to refresh comments on IGV-2.12% , the Ishares expanded Tech-Software ETF, as this is now exceeding 90, and officially breaking out above two prior peaks from this year along with Nov 2021 in a very bullish Cup and Handle pattern back to new all-time high territory. While Semis still are outperforming Software on an intermediate-term basis, Software has shown better relative strength since this Summer. Note, this Software outperformance is not the normal MSFT-1.45%  led rally. Rather, it's being led by PLTR-2.57% , ORCL-4.78% , NOW-2.16% , and strong movement out of the likes of CRM-2.56% , PANW-0.47%  which i suspect should rally back to all-time highs. (More on this topic in tonight's report)

^SPX-1.59%  looks to be kicking off its push back to new highs with about 10 more trading hours left in the month of August. As you can see, the short-term hourly trend connecting former minor peaks since this past Monday has been exceeded. this should drive price up to 5682, then 5700. Breadth is a bit better than 2/1 bullish and volume also 2/1 positive. 9 of 11 sectors are positive and the only down sectors are defensive- REITS and Staples. While Energy, Industrials, Discretionary, Healthcare and Tech are all up more than +0.75%. Despite NVDA being down fractionally (At 6% of SPX), SPX is still managing to push higher by +0.68%, led by BBY-0.40%  COO-2.01%  CRWD-3.48%  WST-1.26%  HPQ-1.11%  GEV-2.48%  PANW-0.47%  QRVO-1.26%  and INTC-4.10%  all higher by more than 4% today

2 hours into trading, we see S&P has just surpassed yesterday's intra-day peak (ES-0.63% _F- 5616) by S&P Futures which has helped this rally to accelerate. Breadth is just mildly positive, and Financials and REITS are the only two sectors higher today on an Equal-weighed basis, Technology is largely flat, but XLK is up +0.28%, powered higher by a near-4% bounce out of CRWD-3.48% , along with AVGO-2.75% , FSLR-1.56% , NOW-2.16% , and PANW-0.47% , all which are higher by more than 2%. Software stocks are leading Semis today, and NXPI-1.00% , ON-6.77% , and TXN-1.25%  are all lower by more than 3%, and SOX is lower by -0.85% at a time when XLK is outperforming. Transports are lower by 1%, but Small caps are showing stellar strength, up by 1% (IWM-2.67% ) as the SummerOfSmallCaps has arrived. Both US Dollar and Treasury yields are pulling back from earlier bounce attempts, TNX still down -0.02bps - Target initially for S&P Futures lies near 5721

Technology's gains today on an Equal-weighted basis are +0.45%, which are swamping the +0.11% seen in XLK today. Thus, while stocks like MPWR-5.34% , NOW-2.16% , WDC-2.14% , NVDA-2.83%  are down more than 1%, the Technology sector is actually outperforming the ^SPX-1.59%  today, thanks to a strong showing from ON-6.77% , TRMB-2.19% , ACN-2.17% , SNPS-3.01%  and PANW-0.47%  which are all higher by more than 1.75%. Technology as a sector is just exceeding prior lows from mid-March after yesterday's successful breakout above late April peaks. This is a very bullish move for Tech, and should help this group continue higher on an absolute basis. As discussed, Tech also remains an Overweight and likely will start to outperform ^SPX-1.59%  as Treasury yields begin to fall at a bit quicker pace

Palo Alto Networks weakness has begun to stabilize at a very visible area of intermediate-term trendline support, and this area from265-275 is important and likely provides support ahead of an upcoming bounce. While the high volume selloff this week is a concern potentially on a 6-8 week timeframe, (and might have some detrimental effects on weekly momentum) at present, PANW-0.47%  has found good support at an area of trendline support that has held no fewer than three prior occasions since early 2023. I expect at least a 38% retracement of the damage of the prior two weeks and near-term technical targets lie at 307, then 321. Any break back below this week's lows of $260 would be a temporary negative, allowing for a bit more deterioration. However, PANW stands out as an appealing risk/reward at current levels given this strong structural support.

The choppy equity performance of first two weeks Jan tells us we are in a “difficult” period and probably like this most of first half

• but as we noted in our latest note and video
• we see new highs in Jan because this is what happens when we get within 1% of all time highs
• but new highs doesn’t mean “easy sailing”

So be wary. For the full year, our top ideas:

• small capsIWM-2.67%
• financialsXLF-2.54% KRE-3.76%
• industrialsXLI-1.14%
• technologyXLK-2.35% QQQ-1.83% HACK-1.40% PANW-0.47%
• even miners/bitcoinBITB0.58% MARA-3.49% RIOT-1.87%