March E-mini S&P 500 Index futures are also under pressure after breaking trendline support at 6,949.50. This trendline started with the November 21 main bottom at 6,583.00 and was tested at 6,771.50 on December 18 and at 6,866.75 on January 2.
Persistent selling pressure could drive this market into the 50-day moving average at 6,888.00. If this level fails, look for a further drop into 50% of the 6,583.00 to 7,036.25 trading range at 6,809.50.
Sector Rotation: Energy Surges While Technology Tanks
Six out of 11 sectors are lower at the mid-session with energy leading with a 2.53% gain and technology posting the largest decline at 2.09%.
Nearby crude oil futures are leading the energy sector higher with a 1% gain late Wednesday as speculative traders bet on a possible supply disruption in Iran. Meanwhile, supply continues to be a major concern with the EIA reporting another inventory build in this week’s report.
China Cybersecurity Ban Hammers Tech Stocks
The technology sector is being dragged lower by shares of Broadcom, which are down 4.4%. Reuters is reporting that Palo Alto Networks and Fortinet are under pressure because Chinese authorities have told domestic companies to stop using cybersecurity software made by roughly a dozen U.S. and Israeli firms. Their shares are down 1.5% and 2.2%, respectively.
