Summary
The stock market may have hit a short-term technical low on Tuesday, as the S&P 500 (SPX) and Nasdaq 100 (QQQ) bounced off their 61.8% retracements of the rally since August. And yet, the SPX dropped to 5,528 midday (the lowest level since September 2024), rallied back into positive territory (peaking at 5,636), but once again pared a lot of its intraday gains — leaving us with more questions than answers. The SPX closed at a new pullback low, falling 0.8%, the Nasdaq dropped only 0.2%, and the QQQ fell 0.3%. Some of the biggest gainers came from the former leaders that are also the most beat-up issues. These stocks mostly are in Information Technology (the beneficiaries of the AI and data center build outs, and utilities). The largest gainers on the SPX were SMCI, LUV, CRWD, VST, and GEV. On the QQQ, the winners were MSTR, MDB, and APP. Unfortunately, these stocks need a lot of repair work in order to correct the massive technical damage that has been inflicted on their charts. The 14-day Relative Strength Index (RSI) has cycled into very oversold territory at 28.4%, which is the most-oversold reading since September 2022 near the bear-market bottom. The VIX Volatility Index fell on the day and is back inside its upper Bollinger Band (BB). A lower close by the VIX will give us a short-te
