Like the military aspect of the conflict, I hoped for an even harder pounding of Iran in Scott Bessent’s messaging yesterday. I understand it’s a big move with more to follow potentially, and as the WSJ Editorial Board points out, there are major signs that economic pain is already taking a toll. Still, the overall might of the U.S. has been held back, and it's only emboldened those leaders who will live well, even as the average Iranian deals with record inflation and scarce resources.

Yields Picture

Market Holds

The overall market held up well yesterday, a great sign, as eight of eleven sectors finished in the green.   Utilities (XLU) bounced, perhaps capturing some of the cash fleeing semiconductors. Software (IGV) and consulting stocks certainly took a bid with some of that cash.

Overall, it was still a very defensive session.

Light Summer Volume

Market breadth was muted. Even though it was even across the board for the New York Stock Exchange (NYSE), there were significantly more decliners than advancers on the NASDAQ Composite.

Overall volume was the epitome of a summer doldrums session, but even there, NASDAQ buyers were more determined than sellers.

Emotions Rule (for now)

Nvidia (NVDA) was down for the seventh consecutive session, and semiconductor stocks dominated the list of biggest decliners.

Semis Yellow Flag

The inability to break through and close above the 50-day moving average is worrisome in the near term.  Longer term, we will look back and see this was an opportunity, but living it each day is harder for many, especially those who haven’t investigated the trends, books, and financials.

Being oversold doesn’t mean a bottom. I hope VanEck Semiconductor ETF (SMH) can avoid testing the 200-day moving average.

The good news is there isn’t a lot of selling volume (although old-timers love to see the market “puke” and “panic” forces everyone into a foxhole), and the relative strength index (RSI) is nearing a screaming buy point.

Massive Momentum Swings

Momentum (MTUM) was down again, but these momentum readings aren’t telling the whole story.  MTUM and the S&P 500 Momentum (SPMO) have slipped below their 50-day moving averages.

Goldman Momentum Indicator

The Goldman Momentum Indicator has seen a surge in one-day selloffs of more than 5%. This is the panic old-timers long for, but it also means near-term vulnerability, putting extra emphasis on great news and developments to resonate.

But snapping this to the upside will also be a major “buy signal.”

Today’s Session

Semiconductor names have been taking more cues from the Korean market (Kospi) than from fundamental underpinnings. The Kospi held overnight, and there is tire-kicking in key US tech names.

Lots of tongues wagging over Stan Druckenmiller's op-ed pushing back on the use of buybacks by Treasury Secretary and former employee Scott Bessent.

I’m not sure where I stand on this one – still studying it.  A lot of forces are outside Treasury’s control.  I suspect the glee over this piece comes from folks looking for a rebuke of the administration in general and Bessent’s strong role within it.

Purists probably hate the action as well, but that always makes me think maybe it’s the right move or heading to the right solution that benefits a wider swath of people.  Let's see if early buying can lure fence-sitters. It’s important to have some cash right now.

Comments

Big tech rally coming this fall Load up mark Sutton on 8/25/2026 8:10:04 AM

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