TheoTrade’s Tale of the Tape: Did Bulls Buck the Bears?

Bears felt the heat and were squeezed the entirety of last week, as bulls forced a close near the highs of the week on Friday. Markets also digested soft labor data, as well as retail spending numbers that came in above estimates.

So, just like that – is the recession canceled? Not so fast – I think that policymakers are walking right into an inflationary trap in the coming months, which could seriously harm the Fed’s credibility in the long-run.

But we’ll worry about that later. We have to trade today’s price action above everything else, and ignore the rest of the noise. Fortunately, I’m pleased to report some positive developments on the sector leadership front after last week. Take a look…

Technology Surges as One-Week Leader

Remember last week when I reported that we had a “risk-on” signal due to industrials outperforming at the one-week interval? Well, last week the leader was technology, the market’s largest and most important signal. This is even more bullish than before.

Once again, this shows the importance of focus on what’s happening under the surface of the equity indices instead of concentrating on them solely. It’s a market of stocks, after all – there’s always going to be opportunities somewhere.

When I dig deeper into the tech sector, I see a lot of really great setups too. I did an extensive screen over the weekend and noticed several names that are starting to breakout or are on the precipice of doing so. This is not the type of price action you would see in a market that’s discounting an imminent recession.

As long as we don’t see tech implode this week or next, I think this signals that stocks are due to make a new all-time high sooner rather than later.

 

I’ll keep you posted on any other developments I see,

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