Sector Rotation Into Tech

We start the week with the major indices, “The Generals,” diverging from one another. Most striking is the fact that the S&P 500 shows a weekly breakdown from a triangle pattern; volume over the past three weeks. Meanwhile, the tech heavy NASDAQ has enjoyed the influx from a sector rotation out of the oils and back into tech. Earnings reports have been positive for the most part and projections are looking good so smart money is moving back into this sector that has lagged since the market crash at the beginning of the new millennium. The QQQQ is right at support and showing some very nice weekly bullish divergences on its indicators. A retest of its recent highs is likely imminent and a breakout to new highs is back on the table as a reasonably probable scenario before the year is out. We are moving into the monthly buying window, which should have indices moving higher later in the week.