Small-caps and Transports break out while Technology lags

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Meaningful relative strength occurred in Small-caps and Transportation issues Wednesday, which looks quite constructive for the broader market.  Financials have also joined suit in the rally and remain a supportive sector to provide a near-term tailwind for Equities.   Yet Technology has lagged this week and it’s thought that the path for Equities between now and mid-to-late November could be lower given the combination of cyclical and sentiment-based issues.   Pullbacks could begin starting this week, but more likely after October expiration, and the key timeframe seems to hinge on Halloween as being an important point in time.   At present, my cautious one-month views don’t necessarily translate into a tradable short-term bearish view, until proper evidence of markets rolling over has gotten underway.  Furthermore, selloffs should represent a short-term correction only, not the start of a larger decline.  Risk/reward seems poor in the short run, and SPX seems unlikely to exceed 6000 right away.  Meanwhile, QQQ should find resistance at 503-505.

Despite Wednesday’s rally, I believe that Stock indices could be at/near a peak that happens between now and end of m...
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