Pretty Standard Scenario for Twitter

We have a fairly sloppy opening hour of trading today, especially when you consider the glimmers of hope flashing yesterday for tech bulls amid the SMH QQQ outperformance. Instead of immediate upside follow-through, however, we looked at dip-buyers getting soundly stuffed off the opening bell.

As I write this, those tech bulls will need to regroup to prevent further deterioration in what appears to be an ongoing summer correction with sector rotation for bulls far from a sure thing. 

While that plays out, it is almost comical to see Twitter's stock now decide to outperform after notably lagging the tech rally for quarters, if not years, on end. 

On the updated TWTR daily chart, below, a close above the $18 level and the 200-day simple moving average (yellow line) builds a better case for a long-term bottom and inflection point. There always seem to be buyout rumors circulating about Twitter, but it is tough to trust them given the firm's history of botching such scenarios.

Thus, focusing squarely on the technicals makes sense, and they are telling a promising story this morning in the face of a weak tape. I suspect the close today will be telling. 

In the meantime, I am staying defensive in this market and scouting out some fresh hedges on the short side if dip-buyers cannot muster a counterattack.