Equities are in good shape; Yet, noone’s happy until Tech bottoms

SPX and QQQ have been churning following the sharp two-week downtrends from mid-July and ongoing Technology underperformance.   However, given that Treasury and German Bund yields are both lying near key support while SPX and QQQ are just below key resistance, it’s thought that this week’s Central Bank meetings (FOMC, BOJ and BOE) could serve as the catalyst for upside breakouts in both Equities and Treasuries as markets get a bit more adjusted to policy.   Movement over SPX-5492 and QQQ-468 likely could happen coinciding with a breakdown in TNX this week under July lows at 4.144%.  I expect the near-term Technology weakness to be complete by end of week.

Yet again, the dismal benchmark index performance has failed to accurately reflect the underlying market strength, as 10 of 11 major sectors were positive in Tuesday’s trading and both Advance/Decline data and volume proved to be quite positive.

S&P’s Equal-weighted ETF ($RSP) finished higher by nearly +0.50% on the day and has shown positive gains on three of the last four trading sessions.  Meanwhile, Transportation stocks along with Small, and Mid-caps both showed gains of +0.35-+0.50%.

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