All major sectors lower but Big-Cap Tech still surging into Earnings

Near-term trends are bullish for SPX, but the rally is nearing resistance while big-cap earnings out of Technology get underway in earnest starting tomorrow. I continue to believe that SPX likely won’t immediately eclipse 6950, and Tuesday’s price action proved to be a possible “tell” of what might materialize between now and next week as the price action grows increasingly choppier. While trends remain certainly quite positive, I feel like VIX at 16 is quite attractive on a one-month basis, given quite a few “unknowns” might not properly reflect the risk of not only the upcoming earnings being disappointing, but any change in Central bank policy and/or a less than concrete outcome in the coming meeting between Trump/Xi. A few of the short-term cycles seem to come together with DeMark indicators to suggest next week could be important heading into November. However, as always, the proof will be in US Equity markets, demonstrating that a possible consolidation is likely next month.  At present, Semiconductor Index (SOX) still looks to push higher into next week, and it remains difficult to fight the near-term momentum in Technology.

U.S. equity markets performed as might have been expected, given $SPX and $QQQ having pushed higher into near-term channel resistance. $SPX finished fractionally positive today, but all 11 major sectors were lower. However, despite Technology as a sector having finished down on the day, stocks like $SWKS $INTC, $NVDA, $PYPL, $CRWD, and $AVGO all finishing higher than 3% on the session helped $XLK finish positive again in trading.

This kind of divergence (where Tech rises, but the broader market doesn’t) has been ongoing since July, but grew decidedly more pronounced as of this past week. It’s not a technical positive when nearly five (of 11) sectors finish with losses of 1% or greater in trading (Utilities, Energy, Discretionary, REITS, and Staples), and market breadth finished around 3/2 negative.

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