I don’t know if it’s just a sign of the times (or a sign of the top), but technology stocks are back in favor and leading the market to within spitting distance of new highs.
The SPDR Technology Sector ETF (NYSE: XLK) is ranked No.1 on my Cycle 9 Alert Leaders & Laggards Board this week . That means it has the strongest forward-looking momentum of all sectors in the S&P 500.
At the moment, the Cycle 9 algorithm is still characterizing the technology sector’s trend as bearish. But that will likely change to bullish within the next week or two. Shares of XLK are now only 1% below their October high, so a new-highs breakout could soon be in the works.
And it’s not just this broad technology sector fund that’s grabbing my attention…
Industry Groups and Niche Technology Groups
The SPDR FactSet Innovative Tech ETF (NYSE: XITK) is displaying a bullish trend and market-beating momentum. It’s also less than 1% away from minting new highs.
Same goes for the SPDR Software & Services ETF (NYSE: XSW). A bullish trend, market-beating momentum, and with 1% of new highs…
The SPDR Semiconductor ETF (NYSE: XSD) is in the same boat — bullish trend… market-beating momentum… within 2% of new highs.
And I can’t forget about the First Trust Cloud Computing ETF (NYSE: SKYY).
Several of the technology-umbrella industry groups and niche technology ETFs are sending the same bullish message. That’s something to take note of, as it suggests the broader technology sector is healthy and — for now at least — enjoying an outsized portion of investors’ inflows.
You could take a shot at a bullish play on one of these today. But I still think it’s prudent to wait for some confirmation from a few other market sectors. That’s the advice I’m giving my Cycle 9 readers: be patient, as we’re likely to see a more “bullish” environment within weeks.
For now, it’s only the technology sector that’s displaying both bullish trends and market-beating momentum. So keep a close eye on tech… but let’s also see if the rest of the market’s sectors can hop back on the bull train before we go all in.