In the last update I mentioned that the Nasdaq needed some leadership. One group that has been trying to lead is the deep cyclicals.
Morgan Stanley Cyclical Index Weekly/Daily Chart
Back in Mid-May the Morgan Stanley Cyclical Index (CYC.X) had broken a long-standing downtrend. Yesterday this index came close to falling back below that line. A drop below 550 would have completed a double top that can also be found on the Dow Jones Industrial Average. Today's reprieve has given the Cyclical Index enough time for the 50-day moving average to catch up and offer a little support. The stochastic is getting close to oversold territory, and could help to keep CYC above the downtrend in the coming days. If this sector is going to continue to lead us in the future, it's going to have to hold the current level.