As breadth deteriorates across major indices, managers look to hold outlying leadership. This week it has been performance in tech and consumer discretionary holding up the S&p 500. If you drill into the top holdings of $XLK, the info tech sector, you see selling pressure in Adobe $ADBE, Salesforce $CRM, Microsoft $MSFT and others. There are only a few leaders...
Short Term view in XLK suggests the rally from October 5 low is unfolding as a 5 waves impulse Elliott Wave structure. Up from October 5, wave ((i)) ended at 153.71 and pullback in wave ((ii)) ended at 149.60. Internal of wave ((ii)) unfolded as a zigzag structure. Down from wave ((i)), wave (a) ended at 150.53 and wave (b) pullback ended at 153.15. Stock then...
Channels that I see with the SPDR select technology fund. It was pretty well contained in this channel since 2008, but as you can see the COVID rally has pushed it way above. Right now it is in a larger parallel channel that has its mid line (red dotted) just above the major peaks since 2015. Will this channel hold Tech? HArd to tell, but so far it has been strong...
Daily chart created negative divergence with PPO. Typically that indicates weakness in the trend. Interestingly this happens to be at the upper boundary of the channel that has developed back in 2020.
Unless price bounces back this afternoon or tomorrow morning, it’s reasonable to expect some sort of the pull back. Most logical level would be just below $144...
This is about a simple as it get from a TA perspective. Tech broke the 2009 channel back and July 2020 and has not looked back since. Given its current strength and trajectory it could keep running all the way to November before we see another pullback. The air is really thin up here, but investors don't seem to care.
Tech vs Spy.. Not a good look for tech yet. While we remain under that marked line, its hard to be bullish tech overall for me. Will continue to watch.
Arca
