After yesterday's session, I'm surprised the Fear & Greed Index didn't swing back to ‘fear.’ I say that tongue-in-cheek, but the market felt shaky, not because it was down but because of the reason(s) behind it. The Biden administration's sabotage of even more restrictions to high-end computer chips sank the entire Artificial Intelligence (AI) trade. 

Note: anyone who thinks it was Trump's comment on Taiwan or that a Trump administration wouldn't defend that island nation is being disingenuous.

Yes, he wants Taiwan to pay more or do more, which is not unreasonable if we are to send men and women to fight China should there be conflict or an invasion (China is far more prepared for this battle than we are).

Either way, the selling was overdone.

This heightens the importance of today’s session, as “Buy the dip” (BTD) or “Buy the ******* Dip!” (BTFD) has become the mantra for investors this year.  A very profitable mantra. However, we did see some buying continue to broaden out, but it takes a lot of winners to make up for big losses in Technology (XLK).

Red Chips

Buyers sought out old-school Bue-Chip (names that have been around for a hundred years) as they bolted from red chips (names poised to dominate the next hundred years).

Consumer Staples (XLP) enjoyed the best session, followed by Energy (XLE), and Financials (XLF).

Trillion Dollar Pullback

The “Magnificent Seven” have shed more than $1.1 trillion in market capitalization (market cap) over the past five sessions. Technology is still sitting pretty on the charts, holding above the 50-day moving average and the next major support point of 210. Money flows have crested but are elevated and the Relative Strength Index (RSI) is down a lot – the buy signal is coming up.

Trump Trade

Investors have bought even more iShares Russell 2000 ETF (IWM) calls.

Rate cuts will help, but this is the Trump Trade – see what happened when he won in 2016.

Today’s Session

Initial Jobless claims are higher than expected.

Continuing claims are really soaring, rapidly moving toward 2.0 million.

The Philly Fed report came in better than expected, but we haven't compiled the details. The Fed is making a mistake, but some intelligent folks think the economy is still too strong for a rate cut. Many economists and strategists also speak from their political viewpoints when looking at the data (the direction and rate of change).

Today's session will be essential to see if there is equilibrium from recent wild swings.

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