Stocks Bounce at Support as Rising Yields Keep Pressure on the Rally

Stocks are bouncing today, with the S&P 500 Index (SPX), Invesco QQQ Trust (QQQ), VanEck Semiconductor ETF (SMH), and iShares Russell 2000 ETF (IWM) all getting some relief after reaching technical support. The bigger question is whether that bounce can hold while the U.S. 10 Year Treasury Yield (US10Y) remains elevated and Friday’s nonfarm payrolls report approaches.

The S&P 500 Index bounced after a sharp three-day decline brought it back into support around the previous June 2 pivot high. QQQ gained 0.23% and also held support, although it is now sitting in a less defined area. If selling returns, the $700 gap fill is the first level to watch, followed by support at $695.25.

The VanEck Semiconductor ETF bounced after returning to its August 24 low, with buyers responding around $544.43. The first upside resistance is the declining trend line near $595. If the selling resumes, the next important support is around $533.49.

The iShares Russell 2000 ETF also bounced from the 50% area of its rising parallel channel. If this move develops some momentum, the next upside area is around $297.

The bigger issue for all of these markets is still the U.S. 10 Year Treasury Yield. It reached 4.816%, tested the important 4.809% resistance level, and then pulled back. If 4.809% continues to hold, yields could cool somewhat, but a sustained move above it would bring 5% into focus. That makes Friday’s nonfarm payrolls report especially important because it could move yields and help narrow expectations between a rate increase and no change at the September Federal Open Market Committee meeting.

Commodities are also sitting around important technical levels. Gold Futures (GC) bounced from support around $4,333, where a Fibonacci retracement aligns with the lower part of its rising channel. Silver Futures (SI) is testing $63.26. If yields cool over the next several days, silver could have room toward $67.99.

West Texas Intermediate Crude Oil Futures (CL) may be setting up for a near-term pullback after reaching the area of the July 23 and July 24 candles. Support is at $87.77, while resistance is at $96.44. Natural Gas Futures (NG) pushed higher and is approaching resistance between $3.11 and $3.12. Its daily Relative Strength Index is at 66.24, getting closer to the 70 level considered overbought. The larger near-term target remains around $3.25.

Technology stocks are giving us several very different setups. Dell Technologies Inc. (DELL) opened at $462.05, pushed as high as $483.94, reversed toward $432, and then recovered to $497.99. Dell closed above its declining trend line, but the breakout still needs confirmation with a daily close above the latest candle. The next major resistance is around $514.

MongoDB Inc. (MDB) beat earnings and revenue and raised full-year guidance, but its cloud database platform grew 29% year over year, and investors were looking for stronger growth. The previous breakout failed, leaving resistance at $417.35 and support at $361.05, followed by the more important $331 area.

Skyworks Solutions Inc. (SWKS) confirmed a breakout with a gain of more than 6%. Resistance is at $76.01, while a pullback toward $64.59 would bring the previous breakout area back into play.

Palantir Technologies Inc. (PLTR) fell 5.81% but managed to close back inside its recent range. A close below $171.04 would increase the probability of a deeper retracement toward $157.05, followed by $140.27.

GoPro Inc. (GPRO) is a much more stretched setup. The stock was near $0.60 on August 28 and reached $1.90 in postmarket trading after an online streamer said they had purchased about 8% of the company. The key breakout level is $1.83, and an opening above that could put $3 in play. The risk is that the daily Relative Strength Index is already at 87.82, well above the 70 overbought level.

Bitcoin (BTC) is the crypto chart I would watch most closely. The larger structure remains a bull flag, but the near-term setup is weaker. Bitcoin is consolidating in a bearish pattern, with $76,219 as the key level. A close below that would increase the probability of a move toward $72,000, followed by the bottom of the parallel channel around $66,833.

The positive sign is that the latest two daily candles have developed meaningful lower wicks, showing buyers are responding. For the structure to improve, Bitcoin needs to recover back into the $80,000 range and start pressing resistance again. Until that happens, the longer Bitcoin stays inside this near-term bear flag, the greater the risk that $76,219 eventually gives way.