On Monday, I noted that the underlying technicals of the market had changed; more aggressive, “growth areas” of the market were rising. Below are daily charts of (in order technology, financials, energy and health care ETFs). Combined, these four sectors comprise 57% of the S and P 500.
Technology (which accounts for 19.39% of the SPYs) is in a strong uptrend. After consolidating in a symmetrical triangle, prices have been moving higher. All the EMAs are rising and the shorter are above the longer. The MACD is positive and the A/D and CMF are all rising. Notice that over the last four days, we’ve also seen a bump in volume.
Financials (which account for 14% of the market) are also rising. However, add that they have (finally) crossed their 200 day EMA to the picture.
Energy is a bit behind the curve, as it it still constrained by the highs of late October. However, prices are bumping up along that line. Also note the positive underlying technicals — rising EMAs and volume indicators. The MACD is not negative, but also not positive, which is obviously a slight negative.
Health care (which accounts for 11.64% of the average) shares all the above bullish points, save one: the MACD is about (or already has) given a sell-signal. Yesterdays prices action, if it continues, could change that development, but we need several days of strong price action for that trend to develop.
Overall, the largest sectors are, well, looking pretty good. If energy breaks out (which is highly likely assuming the volatile oil market environment) it would replace the possible downward pressure exerted by a correcting health care sector.