NVIDIA Is Back in Charge, but the Rest of the Market Isn’t Following
While Nvidia powers higher, market breadth continues to weaken, defensive sectors are losing momentum, and several key indicators remain out of sync.
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The Market
Oh, the chop!
Today, Nvidia (NVDA) got the nod (see my comments on the stock in last evening’s missive), so most everything else had to take a back seat. I wish it were different, but it is not.
Naturally, that meant that drugs, which had benefited from NVDA’s pullback, had to get sold. Notice that while the S&P tacked on 28 points, the RSP was red on the day.
I might point out that the Bank Index made a new high, but it seems to have done so on the back of JP Morgan and not Citigroup. Again, more mixing, slicing, and dicing.
The good news is still that we’ve got the ‘what if’ on the Nasdaq McClellan Summation Index so close to being at an extreme oversold condition. And we have the Volume Indicator (shown here two days ago) at 49%. 47% gets this indicator to an oversold condition.
Am I being too picky by waiting for that setup? Maybe. But the DSI for the VIX was 14 coming into the week, and it is now at 18. In my view, to get a rally that lasts longer than a few days, we probably need to see that VIX DSI well over 20 because that gives it room to fall as we rally.
I’d love to tell you today changed the indicators, but it did not. They remain sloppy.
New Ideas
There is someone who has asked about Coinbase (COIN) several times recently, so I want to follow up by noting it might be enjoying a small head and shoulders bottom. So as long as it holds the low from yesterday, it’s worth a trade since the risk/reward is decent.
It’s time to take a little something off when it comes to the trade in the Utes. Back in late May/early June, I liked the Utes again. They had a decent run in June, but the past few weeks, XLU has run smack into resistance and has tried three times to chew through it and has not been able to do so. I think XLU is vulnerable to that 44-44.50 area.
Today’s Indicator
The McClellan Summation Index is flat. Nasdaq’s, as we discussed yesterday, is heading down, but the NYSE hasn’t budged in weeks.
Q&A/Reader’s Feedback
Adobe (ADBE) keeps enjoying these short-term rallies, and then it runs smack into resistance. Right now, it’s just run smack into resistance. I do think it can rally again, but without a base, it’s hard for me to get excited about the stock until it forms a better pattern. I would love to see it spend the next few months going sideways, building a base. They could give it a good setup heading into year-end/early 2027.
The break this week in Oracle (ORCL) is not bullish. However, with the stock almost halved since the first day of June tells me it’s oversold, so I would think within the next week, there will be a short-term oversold bounce in this. I would get quite concerned if the stock cannot rally over this 135.
Healthcare Realty Trust (HR) is a decent chart, but some might call that pattern I drew in a bear wedge. I would just say that there is a measured target in the 21-ish area, so it’s difficult for me to get excited about it. I’ll call it a hold with a tight stop under that line (currently 20.30-ish.
Taiwan Semiconductor (TSM) is at the top of support, with the bottom down around 380. I’d say the stock remains vulnerable to more corrective action. If the stock can go sideways for a few more weeks, I might warm up to it, otherwise it feels vulnerable to getting further into support.
Comcast (CMCSA) has had a tendency in 2026 to spike, and that spike gets sold. Can it rally again? Yes. But is there enough of a base to take more than a quick trading position? Not for me. Should this stock still be down and out a few months from now, then it becomes a great candidate for tax loss selling, and when that dries up, the stock starts to set up better.
