S&P 500 did indeed reverse gloomt positioning Friday, and my Sunday prediction of SPX correction only, is proving right. Failing twice to overcome 4,415, today‘s session saw 4,388 break on retail sales coming strongly above expectations. No issue though for nimble intraday traders though as our premium Telegram calls brought you well over 100 ES e-mini pts yesterday combined – and today‘s supports already shared as much as in my chart analytics below.

Good economic data though brings up the Fed rate raising fears (no matter how much dialed back these still are till Dec 2023) – and a stock market dip that would get bought. As I wrote in the intraday channel, such a reaction would happen within 45min of the opening bell (buyers gradually emerging), and it would have to start with Nasdaq stabilization first, and EURUSD giving up at least halft of the post retail sales downswing.

Goldilocks economy is to still win over rate raising fears – the multitude of recent Fed spearkers are to be trusted as regards of Nov or even Dec rate hike absence.

S&P 500 and Nasdaq Outlook

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4,365 is a good enough support, but may be temporarily broken so as to shake off weak longs. 4,354 though wouldn‘t be reached or broken as this is where strong bid is to emerge latest. Again, it would be cyclicals to lead stocks higher, and communications underperformance would be apparent on a daily basis today (even compared to tech).

Sectors and Stocks

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Consumer discretionaries are one of those overweight rather than underweight sectors. The consumer isn‘t in bad shape (household balance sheets), and XLY with AMZN are likely to recover from today‘s weakness reasonably soon.

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