• The tech stocks are seeing some weakness this morning…and the further rise in long-term yields…around the globe…are getting the blame. This rise in yields has been going on for 10-months now. If history is any guide, it’s only a matter of time before this rise creates some meaningful headwinds for the equity market.

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• The bulls remain in charge of the stock market…and it has been able to ignore higher long-term Treasury yields. However, we’re heading into a seasonally rough time for equities…and history tells us that stocks cannot ignore higher yields forever. Therefore, investors should still remain very nimble in the days and weeks ahead.

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I will be on vacation next week, so there will be no weekend piece next weekend (nor daily pieces as well)……I will be back on Monday, August 17^th…and will return to my regular publishing schedule. Thank you very much.

Table of Contents:

1) Fed Liquidity: Why the Fed may have little choice but to keep supporting the financial system.

2) Long-Term Interest Rates: Why Treasury yields could eventually decline—but remain vulnerable to further increases.

3) Corporate Bonds: Growing credit-market stress, heavy debt issuance, and warning signs for risk assets.

4) Technology Stocks: Why the tech rebound may not be the all-clear signal—and why 2000 still matters.

5) Major Averages: A powerful market rebound that still needs broader confirmation and follow-through.

6) Precious Metals: Gold, silver, and miners are rebuilding bullish momentum after their earlier correction.

7) Energy: Why the Strait of Hormuz, tight oil supplies, and technical setups keep the sector compelling.

8) Aerospace & Defense: A potentially multi-year defense-spending cycle—and why Northrop Grumman stands out.

9) PLTR & KTOS: Two technology-driven stocks on the cusp of potentially meaningful technical breakouts.

10) Summary of our current stance.

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• The bulls are definitely still in charge, but the fact that SO MANY tech stocks continue to respond poorly to their earnings reports/guidance keeps us from saying that the new high in the S&P 500 is a signal that a new leg to the bull market has begun. In other words, the recent bounce in the tech sector might (repeat, might) just be nothing more than a relief rally to work off the oversold condition that had developed in late July.

• One tech stock which HAS reacted positively to their earnings report now stands at KEY technical juncture. So, whichever way it moves over the next several trading days could/should be extremely important for how it moves over the coming weeks/months.

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• The rally off the lows from last week in the stock market…and especially in the tech sector…has been an impressive one. However, it still needs to see more upside follow-through…especially since the NDX is acting to a similar way to what took place at the top in 2000.

• If this bounce CAN hold…and signal that the worst of the recent decline in the tech sector is behind us, some other groups should come along for the ride. One of them is the financial sector…and one stock in that sector looks particularly good on the technical side of things right now.

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The markets STILL stand at a critical juncture…so we’re not going to get any “summer doldrums” this year. The action in the tech sector…the Treasury market…the currency market…and the geopolitical landscape will be critical over the next few weeks! (Subscribers will find the link below to join.)

We are heading into the seasonally rough time for the markets, so staying on top of all of these issues is going to be EXTREMELY important going forward.

I look forward to seeing you all at 12:00…and I also look forward to any questions you might have for me!

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Table of Contents:

1) The Tech Sector has to Bounce A LOT More to Signal that the Worst is Behind it.

2) Wall Street has to Adjust to Warsh as the New Fed Chief, Not the Other Way Around!

3) Higher Long-Term Interest Rates Are Being Driven by More Than Inflation.

4) Japan’s Yen Intervention Could Have Major Liquidity Implications.

5) Key Support and Resistance Levels for the Major Averages Will Shape the Market’s Next Move.

6) Escalating Geopolitical Risks Continue to Favor the Energy Sector.

7) Housing Stocks: Short-Term Relief Possible, but Intermediate-Term Risks Remain Elevated.

8) The Healthcare Sector Still Looks Quite Bullish, but it Does Need to Rebound Further Soon.

9) Summary of our Current Stance.

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In this week's Podcast, we discussed the implications of the newest cracks in the wall of the bullish scenario for the stock market......This does not mean that the market cannot see a very-short-term bounce soon. However, as these cracks get bigger and become more numerous, it's creating the kind of "set up" which could be followed by a much deeper decline in risk assets in the coming months than most people think is possible right now.

• The markets gave us a harsh response to Fed Chairman Warsh’s comments yesterday, but the stock market is finally approaching an oversold level. Stocks could easily get more oversold before it sees a bounce…but if they do bounce soon, it will be essential that the tech-related indices and ETFs regain their “old support” levels. A failure at those levels would be extremely bearish.

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• The focus will turn to the Fed’s rate announcement and Chairman Warsh’s press conference today, but the tech sector is still the most important issue on the docket for investors this summer.

• We still believe that the decline in the chip stocks…and the dramatic fall in South Korea’s KOSPI Index…are clear warning signs for US investors. The S&P 500 has been able to remain steady so far…and it could even see another bounce or two over the near-term. However, if history is any guide, these developments could be important examples of a canary in the coal mine.

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• The SOX semiconductor Index is now down more than 21%...but the S&P 500 has only declined by 2.5%. Over the past 30 years, deep declines in the chip stocks have always involved a significant drop in the SPX as well. Sometime (usually) the declines (for both) took place in tandem…but sometimes the drop in the SPX came with a lag (like it did in 2018)……..Can this divergence be resolved with a strong rally in the chip stocks going forward? In other words, will it be different this time?

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We’ll touch on the War in the Middle East and now the new developments will likely impact the price of oil……However, the two most important issues this week should be the Fed meeting…and the reaction of several key stocks to their earnings/guidance this week…….We’ll also be discussing the growing problems in the corporate bond market…which are raising some serious warning flags.

I look forward to seeing you all at 12:00…and I also look forward to any questions you might have for me!

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Table of Contents:

1) Strong earnings & abundant liquidity continue to provide important support for stocks.

2) The AI leaders continue to deliver strong fundamentals, but weakening price action is raising important warning flags.

3) Credit Markets Are Beginning to Crack…as some key credit spreads are beginning to wide significantly.

4) Long-term interest rates ARE at levels which should provide headwinds equities…no matter what other try to say.

5) Index charts: The broader market remains resilient, but several key technical indicators are beginning to weaken.

6) Geopolitical risks should keep oil prices elevated…supporting a constructive intermediate-term outlook for energy stocks.

7) Rising energy and food prices suggest inflation may remain more persistent than many investors expect.

8) Consumer spending remains resilient, but mounting inflation and higher interest rates are beginning to test that strength.

9) Potpourri…..The financial stock ETFs remain at key technical junctures.

10) Summary of our current stance.

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