Yesterday was a mixed session with most major indices ending on either side of unchanged. The barbells of the recent rotation did take a pause with the NYSE FANG+ index ending higher while the Russell 2k pulled back ~1%. Ahead of the major catalysts of this week technicals have continued to be very much at play and there have been signs of distribution. Yesterday the S&P 500 failed just below 5,500 again which is essentially where the index gapped down to last Wednesday (after the Alphabet/Tesla earnings Chart 1). This morning futures were once again modestly higher with some strength in the mega-cap tech stocks. However, the S&P 500 failed right at the same level again and then the tech unwind kicked in again led by Crowdstrike and Nvidia which is down >5% bringing the losses from the highs to >25% from the highs. That weakness seemed to be triggered by reports that Apple was using Google chips to train its AI based models. The NYSE FANG+ index is underperforming down ~2%. The S&P 500 accelerated to the downside as the index broke below its 50d ma (~5,440) and we are once again testing the key trend line off of the October lows (Chart 2). As we head to print, the S&P 500 is down 42pts to 5,421 (-0.8%), the Dow is up 84pts to 40,624 (+0.2%), while the Russell 2k is down 3pts to 2,232 (-0.1%).