The Slide is Still Closed

Just when it appears as though the broad market is ripe for a more standard summer correction, large cap banks, energy, some Dow names like CAT after earnings, and assorted other rotation threats are attempting to offset continued weakness in many tech names as I write this. 

To be sure, the looming prospect of the FOMC this week, then a jobs number on Friday, in addition to AAPL SQ TSLA earnings, among many others, likely gives bears pause about pressing shorts with vigor. However, upside momentum has clearly been waning in the tech leaders, with AMZN facing a mild sell-the-news reaction to nearly doubling EPS estimates last week. 

While financials are finding their fair share of cheerleaders as the large cap banks rally, the more attractive swing long setups seem to be found in the energy and materials complex, with one eye on emerging markets to see if they can find another leg higher after bouncing in recent weeks. 

Then again, quite a few energy names report earnings over the next two weeks, a clear risk to some of the more enticing charts like PXD. 

Moreover, IWM is pushing session highs right now, again offsetting more weakness from the likes of FB. All of this amounts to a mixed summer tape where we want to actively scout rotations but not force them, either. I suspect if the slide stays closed through the end of this week, bears may have missed a golden opportunity for a more uniform pullback in lieu of the stealth dips and rotations we have seen while the indices do not move much, when it is all said and done.