Market Digest: HWM, BMY, GLW, ITW, MCD, NSC, PEG, SAP, AGNC, IQV, PYPL

Summary

The stock market tried its best to rally on July 29, but with major EPS reports, a Fed decision, and an employment report looming, higher prices attracted sellers and the major indices finished flat. The market will either continue lower in the near term or the pullback will end and new highs are just around the corner. We would bet on the former, as there is no indication from the recent price action of the S&P 500, Nasdaq, and Nasdaq 100 that the selling is over. While the tech-heavy indices, industries, and mega caps have worked off overbought momentum conditions on a daily and weekly basis, we have not yet cycled into oversold territory on a daily basis. Do we have to? Absolutely not — but it probably would be healthy. The last time Technology indices/stocks were oversold on a daily basis was on April 19 — but just barely, with the 14-day relative strength index reaching 30. The last time tech was oversold on a weekly basis was in mid-2022 — and prior to that, during the pandemic. Long-term relative strength leadership rarely cycles into oversold territory on a weekly or monthly basis except during mega meltdowns and crashes. So there is a smell of panic in Technology land as the ‘can’t miss’ semiconductor stocks are stinking it up. But at least the money fleeing those stocks is being moved into other areas of the market. The NYSE, Dow Jones Industrials, the S&P 500 equal weight, the S&P MidCap 400, the Russell 2000, and the S&P Small Cap 600 continue to catch a bid — with most remaining near all-time highs. As of this writi

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