Tech Hardware favored over Software; Meanwhile Pharma/Biotech slides further

Near-term and intermediate-term technical trends remain bullish for US Equities, and Wednesday’s bounce made sufficient progress to help establish a new short-term uptrend, which arguably should carry higher over the next 1-2 weeks to hit new all-time highs and might even exceed 6500. The outperformance of $AAPL has led to a much-needed consolidation range breakout above $216 as of Thursday’s close. This could help energize $SPX and $QQQ despite some increasing weakness being seen in other areas of the market. At present, bearish August seasonality should take a back seat to a push back to new highs, and I don’t suspect much of the weakness gets underway until possibly the August expiration. Furthermore, both Treasuries and the Euro and Yen look to rally over the next week, which also could help Precious metals and Cryptocurrencies push higher as well.  While technical risks have begun to rise in recent weeks, it looks premature to concentrate on these at present as indices begin a climb back to new all-time highs and trends remain positive.  My view is that the next 3-5 trading days could prove to be the most positive of the month of August before some slowdown gets underway.     

Minor churning briefly held back US Equities on Thursday as Equal-weighted sector ETFs of Financials, Technology, Consumer Discretionary, and Communication Services all fell more than -0.50% in trading on Thursday. (Note, $XLK still finished positive despite the loss in Equal-weighted Tech.)

Moreover, there appeared to be additional signs of rotation, as Consumer Staples turned in very sharp gains along with Utilities and Healthcare (Despite the losses in Pharmaceutical stocks)

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