aggressive bull fighting furious bear with stock market image in the background
The Market
As has been the case for a few weeks now, the market can offer us something bullish and something bearish. We are definitely not one-sided.
For example, breadth was fine for the day, but upside volume clocked in at 73%, which is very unimpressive for such a big up day. Can it be that all those ETF puts just got unwound? Maybe, but I don’t like to rationalize an indicator. The last time we had a day like this (S&P up so much), upside volume was at 81%.
And yes, there is resistance aplenty at 6800. Remember how I wanted us to break 6800 and the S&P refused? Well, prior support becomes resistance, and therefore that’s where we are at.
And this rally arrived on day 6 of the rally, so it is getting a bit long in the tooth in the short term. I still think, though, that if we see some pullbacks, we’ll rally again.
Let me also note that the Transports made a new all-time high today. I’m sure someone will say that’s wildly bullish. It’s not bearish (for the Transports), but it does set up a Dow Theory non-confirmation unless/until the Industrials get back over 50,000. I’m calling it a positive for the Transports, but then again, I have been positive on them for a few weeks now.
Some will fuss that the SOX made a new high. Considering the SOX barely got sold, I would just say it’s more of the same.
But what really caught my eye was software vs. energy. As software stocks, which gapped up, sold off to the lows of the day, energy stocks, which gapped down, rallied.
I don’t think there is much to make of the relationship except to say that the trend that was in place in February (energy stocks up, software stocks down) reasserted itself.
I think a pullback on Thursday will tell us a lot about the rally.
New Ideas
American Express (AXP) enjoyed the rally day, gapping over resistance (and like so many charts, closing near the low of the day). It didn’t quite fill the gap up overhead, but it did get to my first resistance area. I’m inclined to take a little bit off the table and hold onto the remainder.
Microsoft (MSFT) did not fare as well as AXP, having gapped right to resistance and closed near the low of the day. Sure, it’s up 10 points since I recommended it, but that is not great. I’ll give it a few more days to see if it can hold.
I am going to say (XLE) held for the time being. I think it is too soon to jump back in, but at least for the day, support held, tenuously.
Finally, United Parcel Service (UPS) , another pick of mine, has not been great either, but it is getting close to that first target around 102-104.
Today’s Indicator
The Volume Indicator, which tagged 47% (oversold) while I was gone last week, is now at 48%
Q&A/Reader’s Feedback
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Tesla (TSLA) has support in this 330-ish area. You can see on the left side of the chart there is support all the way down. I suspect we see a bounce from that support area. However, if I am wrong and it can’t bounce from this support, there is an unfulfilled target around 280-290.
JP Morgan (JPM) bounced right into resistance. If the stock pulls back to that 295-300 area (gap fill) before earnings, I would look for it to rally post earnings. Otherwise, with earnings coming up, there’s not much else to do.
Altria Group (MO) has a terrific dividend, but the chart is mostly in the middle of nowhere. I’m inclined to think if it can get over 67, then it can rally to the low 70s; otherwise, looks like a trading range to me.
Taiwan Semi (TSM) is yet another stock in a trading range in 2026. It hasn’t done anything wrong, though. Should it fill that gap below (345-ish) and rally again and fail to get up and over 370, I would begin to worry.
