DJIA: 45,637

A likely rate cut… that’s worth 800 Dow points? Seems a bit of a stretch, especially with an inflation number out as you read this, and another CPI and Employment number yet to come. Don’t waste a lot of analytical time on this, it’s never about the news – it’s about the market’s reaction to the news. And, of course, it’s not about the 800 points, it’s about the 10-to–1 up-day in the A/Ds. We will be the first to say one day is just that, but recall just a week ago the back-to-back 4-to-1 up days, rare and very positive in a market near its highs. Even NYSE stocks above their 200-Day moved above their recent range to a more respectable 61%. It is Tech’s world, but you don’t see A/D numbers like these without the Financials. There are a lot of them, and they act well.

Heraclitus, an analyst of years gone by (400 BC), once observed you don’t step in the same river twice. You’re not the same person, and it’s not the same river. We know markets change, do analysts? Back in 1972 it was nothing to pay an outrageous 30x for Tropicana. We still drink the stuff though the company has long been merged away. We also have had trouble finding film for the Polaroid. The 50 really were nifty, but knowing their outcome makes it tricky paying up these days for AI. Please, don’t say this time it is different – words that have cost investors millions. Then, too, that’s why it’s good to be a technical analyst. The trend is your friend until it isn’t, and that’s why God made stops.

Nvidia (NVDA – 180) beat on the top and bottom lines, who didn’t see that coming? The stock hasn’t reacted well so far, looking at the last few reports who didn’t see that coming? Wednesday’s after hours fall though modest by Nvidia standards, came to something like $150 billion.  By way of perspective, that’s enough to buy Pfizer (PFE – 25). Meanwhile, if the Tech /AI trade should cool for a while, and with a rate cut on the way, it could further benefit financials.

Frank D. Gretz

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DJIA: 44,786

Strange days have found us… or is it just August? August is full of strange days, rife with its crosscurrents, though purported to be calm. It often surprises with change, the latter certainly being the case on Tuesday, one of the strangest days we can recall. The NASDAQ was weak from the start, the Dow eventually followed, the strange part – NYSE advance/decline numbers were positive all day. As for the NASDAQ, the sacred were not– Nvidia (NVDA – 175) and Palantir (PLTR – 156) almost more than the rest. Gold proved no hedge for Bitcoin, on the contrary.  So, just the vagaries of August, or something more sinister? The data suggests a tremor and hardly the big one. Still, the divergence as simple as stocks above their 200-day against new highs in the averages, has a history of causing problems.

Attention to detail can miss the big picture. For the market, however, if detail is the average stock, it offers the best guide to the overall backdrop. Hence our concern about the divergences between stocks relative to their various trend following moving averages. The idea of the NASDAQ at a new high while stocks above the 50-day average is around 50% is surprising – versus a norm around the mid–70s. That cries narrow participation, and participation is the key to a healthy market. And yet there were 570 NASDAQ new highs last week, a lot! Our typical go – to measure of participation of course are the A/D numbers which have seemed adequate. Then came last week’s back-to-back four-to-one up days, days with 75% of NYSE stocks advancing. Those numbers are not unusual coming out of a washout low, but very unusual and bullish around new highs in the averages.

The late Joe Granville created “on balance volume,” basically the concept that volume precedes price. In his day he was as famous as any, and stranger than most – you know how those technical analysts can be. We recall that he once said at market turns there’s always a hook, something that catches you looking the wrong way. So, were those back-to-back A/D days the hook, or is the seemingly lagging participation the hook? Time will tell, to coin a phrase. Leadership looks a little over cooked but that doesn’t mean over. And leadership like Nvidia and Palantir doesn’t die quickly. Look at a long-term picture of Cisco (CSCO – 67) back in 1999-2000. If this is a bubble, that’s almost good news, there’s still plenty of money to be made in the bubble stocks. Certainly, AI will change the world. Then too, will it do so more than RCA.

Pity poor Berkshire. The likable Mr. Buffett is retiring, leaving everyone to wonder. And then there is the record cash amidst the ongoing bull market. For one of the few times in more than 40 years, the ratio of the stock’s performance relative to the S&P is down more than 20% since April, according to Sentimentrader.com. What has gone wrong? He has been selling some Apple (AAPL – 225) which until the last couple of weeks had not helped. More importantly, he neglected to buy Nvidia and Palantir. As it happens, this is a bit of a repeat of 1999–2000 when he was abandoned by investors for the siren call of the Dotcoms. While the comparison between then and now is intriguing, fret not. Back then the S&P continued higher for months.

They say you never know a bubble when you’re in one. And if you think you know invariably you’re early, and being early is the same as being wrong. Then, too, being late means giving up a lot of gains.  Maybe the best explanation of a bubble is when stocks are bought simply and only because tomorrow’s price is expected to be higher than today’s. Or is that just trend following? As we suggested above, even if this is 1999 that’s not a bad thing. There was a lot of money made before the March 2000 peak – you just need to be in today’s Dotcoms. They’re having their problems this week, but the first leg down is not the end.

Frank D. Gretz

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DJIA: 44,911

Market lows, market peaks… they could not be more different. Other than the obvious, how the change comes about has nothing in common.  Market Lows are emotional sort of affairs, marked by volume, volatility, bad news, fear and even panic. And, of course, they come with washed out sort of extremes. In turn, the process of making a peak is just that, a process. At lows stocks tend to bottom all together, while at peaks it’s not much of an exaggeration to say they peak a few at a time. That’s why watching the number of stocks above their various moving averages is important, particularly the 200-day, a good proxy for the medium-term trend.  It’s a good measure of participation, the key to a healthy market.

So here we are with the market losing participation, and to a considerable degree. Meanwhile, true to the historical scenario, the market averages continue their march higher. And to look at inflows lately, it’s a pattern that almost feeds on itself. Stocks above their 200-day on the NYSE are barely above 50%, slightly better for the S&P owing to its greater large-cap exposure. Making new highs in the market averages is one thing, the rest of the market isn’t exactly close – they’re not even in uptrends. We can always hope the lagging stocks will catch up with the averages, but that hope goes against a lot of history. Liquidity drives stocks, and at present liquidity seems diminished. In the days of the “Nifty 50” and “dotcoms,” liquidity followed strength until even there it dissipated. The question of course is when? If this market can still put together back-to-back days with 4-to-1 up, the answer is not yet.

The NASDAQ 100 as opposed to the NASDAQ Composite is where Tech lives.  Given the leadership in Tech, it is a little surprising, the 100 has its own problems when it comes to divergences. In this case, looking at a 50-day moving average, only 48% of the components are above that average while the index itself is making new highs. By way of perspective, when the index has been at a new high, over the last 40 years the average of stocks up above the 50-day has been 76%, according to Sentimentrader.com. The numbers are surprising, then so too has been the recent weakness in many software stocks. This weakness doesn’t show up in ETFs like IGV (108), thanks to the dominance of names like Microsoft (MSFT – 522) and Oracle (ORCL – 245). However, it is apparent in names like Service Now (NOW – 851), Atlassian (TEAM – 164), Salesforce (CRM – 233), and Workday (WDAY – 222). Seems AI can do what they do.

So was Tuesday’s CPI number that good, and was Thursday’s PPI that bad? The simple answer is – it doesn’t matter. As always, what matters is the market’s reaction to the news. The market now is fixated on a rate cut in September, forgetting that last year‘s 50-basis point cut saw the yield on the long bond move higher. The Fed’s dual mandate does not include the deficit, but it is a mandate for the bond market. If the idea is to help the housing market, a look at homebuilding charts suggest they don’t need help. Financials generally are helping to hold things together, particularly the A/D numbers. And is it possible this is finally the year for Commodities? Lithium may have caught some positive news, the opposite for Copper, but it too looks positive. And it’s always nice to see strength in Antimony, whatever that is.

This has been called a hated bull market, yet no one really hates a bull market. What is hated is watching the bull market in the averages while you’re in the rest. How has Eli Lilly (LLY – 684), United Health (UNH – 272), and pretty much the rest of Pharma been treating you? Or how about those Restaurant and Oil stocks? And if you have figured out Tech is where you have to be, how about those software stocks? Quality names like Salesforce and ServiceNow are each down about 15% in just the last few weeks. Then, too, Apple (AAPL – 233) just broke out. Every market has its leadership, and leadership does what it is doing now, it leads. However, it’s rare and not technically healthy that leadership should be this narrow. Meanwhile, Crypto acts well, but there is a tinge of speculation there. And is it worrisome that the week’s hot IPO has the ticker symbol BLSH (75), or that one of the best performing ETFs was MJ (33) owner of marijuana stocks?

Frank D. Gretz

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DJIA: 43,969

A shot across the bow… or a shot into the bow?   Last Friday’s selloff was blamed on the employment report. However, pre-market the Dow had been down big already, making it more of a follow-through to sell on the news Thursday. When stocks can’t react to good news, it smacks of buyers’ fatigue. It’s never about the news, corporate or economic, it’s about the market’s reaction to the news. It’s also about complacency. Below 20 in the VIX suggests that, as does the equity only P/C ratio back to the February Lows. For the VIX its narrow range is also a worry as it is typically resolved higher, meaning lower stock prices. And then there’s July, one of the best ever, with multiple new highs in the S&P. Unfortunately, that tends to steal from August. While short term, the market has some issues.

The market’s biggest issue is not in the stock averages, but the average stock. Our go-to indicator here is the A/D index, which made a new high just a week or so ago. This index, however, just measures direction, stocks up versus stocks down. Typically, this tells an accurate story of the average stock.  It does not tell you where a stock is in terms of trend, and here there’s a rather big discrepancy. A 200-day moving average is a good guide to medium term trends and hence its wide use. As of last Friday, NYSE stocks above their 200-day were less than 50%. The idea that the S&P is dancing around its highs while more than half of stocks on the NYSE are in downtrends presents a dramatic negative divergence.  These divergences typically don’t end well.

If there were a poster child for “sell on the news,” it would have to be Bitcoin. Passage of the recent legislation now makes it almost legal to lose money.  Meanwhile, the weakness isn’t so much about Bitcoin per se, as it is about the miners and associated stocks like Coinbase (COIN – 311) and Circle (CRCL – 153). Gold is in a seasonally weak period until early October, but stocks like Kinross (KGC – 19) and Gold Fields (GFI – 31) broke out anyway. Seasonality is something to keep in mind, but it is not a trading strategy of itself. And the overall trend in Gold and Silver for now can pretty much override most things. Speaking of trading strategies, how about that 30-year cycle in commodities? There’s still plenty of time left in the 15-year up cycle, making the long-term chart of the Metals and Mining ETF (XME – 78) worth a look.

Tech still runs the show, but not all Tech is equal. Meta (762) and Microsoft (MSFT – 521) stand out, and Apple (AAPL – 220) is trying to break out. There’s Nvidia (NVDA – 181) and Palantir (PLTR – 182), but then there’s Qualcomm (QCOM – 146) and Arm (136).  Another way to go about AI seems to be through those utilities like Constellation (CEG – 336) and Vistra (VST – 206). Also noteworthy are the so-called infrastructure stocks like Sterling (STRL – 300) and Vulcan (VMC – 282). With only about 50% of NYSE stocks above their 200-day, obviously there are some poor charts out there. Disney (DIS – 113) seems one of those, with a not so well received recent report. It also comes to mind because of a letter to the editor in Baron’s pointing out the parks are expensive. That in turn brings to mind a comment by ConAgra (CAG – 19) that they are seeing a consumer cut back, even in snack foods.

Back in October 2018 there were three consecutive days of higher highs in the averages, accompanied by three consecutive days of negative A/Ds. By the end of December the market was down 20%. In 1987 the A/D index peaked in March and continued a pattern of lower highs as the averages continued a pattern of higher highs, that is, until the crash in October. Divergences like those above are not good, but they’re clearly not a timing tool. It’s nice to think divergences can be corrected, but it rarely works that way. Divergences happen because there’s no longer the liquidity to drive up all stocks, it’s the big-cap averages that are left standing. The lack of downside follow through to last week’s poor action suggests at least for those large cap stocks, it’s likely not over.

Frank D. Gretz

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DJIA: 44,131

Utilities… they’re not your father’s Oldsmobile. In fact, these days they’re almost Techy, thanks to AI’s demand for power. But you don’t have to go to those names like Constellation Energy (CEG – 345) and Vistra Corp. (VST – 208), just the chart of the SPDR Utility ETF (XLU – 86) looks more Tech than most Tech. After a two-month training range, XLU broke out just recently, and since it has been in a short-term consolidation, what we use to call a flag pattern. These patterns almost invariably resolve to the upside.

Good markets have their way of ignoring bad news. In turn, good markets embrace any good news. This market did not exactly ignore Powell’s suggestion he might not cut in September, though that paled in comparison to the good news from the M&M boys. Then, too, stay tune for the reaction to Apple (AAPL – 208) and Google (GOOG – 193). Thursday’s reaction was not good and that’s not good, but it’s one day. Let’s see what tomorrow brings for Apple and Amazon (AMZM – 234). Whether corporate or economic it is never about the news, it’s the market’s reaction to the news. The A/D index recently made a new high, not the backdrop against which stocks get into a lot of trouble. That said, the new highs in the S&P and the Nasdaq don’t tell the whole story. NYSE stocks above their 200-day have stayed around the mid 50‘s, meaning little more than half are in uptrends.  Against that backdrop, it’s more than just catchy that most days most stocks go up.

Frank D. Gretz

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DJIA: 44,694

Tariffs… they’re a good thing?  We all have our opinions, but in the end, it’s the market’s opinion that counts. On Wednesday tariffs were a good thing. Then, too, we don’t think for a minute the news was worth 500 Dow points. It’s back to the idea it’s the market that makes the news – this is a market that still wants to go higher. And the rally revived the meandering average stock, to the tune of nearly 2 to 1 up. Were the market in trouble, you would have expected these numbers to start lagging – what we called “bad up-days.” Studies or history clearly favors the uptrend – the S&P has been above its 20-day average close to 60 sessions.  This almost invariably leads to higher prices six months later.

Last week’s theme seemed to be one of “sell the good news,” so it will be interesting to see how Tech reacts this week. Like the S&P, the Tech sector has remained above its own 20-day average to the point where it is typically higher even 12 months later. The market’s problem is the rest of the market. It has been some time since the Equal Weight S&P 500 ETF (RSP – 187) made a new high, and only some 60% of the S&P components are above their 200-day moving average, that is, in medium-term uptrends. Against ongoing highs in the average itself, this is a bit disturbing. For the NYSE as a whole, the number is even considerably less.

Frank D. Gretz

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DJIA: 44,484

Stocks don’t peak on bad news… the news is always good. We are thinking of course of Nvidia (NVDA- 173), and before we go further, there is no important peak here, meaning no imminent downtrend. However, the new China deal did seem as good as it gets and to damn with faint praise, at least the stock didn’t reverse to the downside. Meanwhile, the very next day ASML Holdings (ASML – 745), the maker of the stuff that makes the stuff, tanked more than 10%. It’s enough to make your brain hurt. Tech isn’t going away, and you can quote that, but suppose as always happens in the stock market, emphasis shifts even a bit from well-loved and well-owned Tech, to the elsewhere of something else – Metals, Crypto, something. Gold/Silver has been good and looks higher, don’t drop it on your foot stuff as well. Crypto could be in a blowoff phase of its own. Keep in mind, bull markets don’t go out with a whimper, there’s usually a speculative binge somewhere.

We tend to believe there has never been a shortage that hasn’t been met. Happily, these days there even seems no shortage of good ideas. As for the Semis, there is a long history of shortages and even now. Shortages here have been followed by double ordering, followed by overbuilding, followed by a glut – it’s called human nature. There seems there’s a shortage now in what they aptly call Rare Earths, a shortage that has come and gone a few times. It seems more than a little surprising that we should suddenly decide to sell Nvidia chips to China, or does it speak to the desperate need for Chinese capacity in this rare again commodity? To look at stocks like MP Materials (MP – 60) or the Rare Earth ETF, REMX (49), the charts don’t just say shortage, they scream it. The question is not if, but when will the shortage be met?

In our youth just those few years ago, we assembled what then were called model airplanes, some of which actually flew – for a while.   Who knew we were on the cutting edge of today’s defense technology, what they now call Drones. In technical terms, the stocks are hot. Compare, for example, stocks like AVAV (279) and KTOS (59) to traditional names like Lockheed (LMT – 469). Then, too, RTX Corp. (RTX – 152) is just fine, as are the representative ETFs, XAR (223) and ITA (196).  We had thought the stocks might retrench following the seemingly successful Iran event, but what were we thinking? Defense spending is forever!  In this arena, it’s easy to forget good old GE (261) up some 100 points from its April low – is GE still in the Dow?

Wednesday saw a testing of the waters in terms of firing Powell. Markets revolted – stocks, bonds, and currencies. So much for that you might think, these days you never know. If the goal is to lower rates by now we all know to ask, which rates? The Fed lowered rates a full percentage point late last year while the benchmark 10-year treasury yield rose by that much. For a generation that knows only low inflation and low interest rates, especially rising mortgage rates are a bit of a shock. Removing Powell for cause won’t fool anyone, rather it will be seen as an attack on the Fed’s independence and markets won’t like it. At present inflation is declining and unemployment is low, why mess with it.

Following 10 of 12 positive days in terms of the A/Ds, you might say Tuesday’s 4-to-1 down day was a bit of a surprise. Bad days happen, bad-up days are the problem. Momentum in the Tech sector has cycled positive after seeing 80% of the stocks down 20% in April. And there is the S&P’s Golden Cross, which bodes well for prices 9-12 months out. This sort of momentum should at least allow us to muddle through. Signs that we could do even better came Thursday in the form of gaps higher in PepsiCo (PEP – 145) and Johnson & Johnson (JNJ – 163). Staples and Drugs have been less than stellar performers, this action suggests there is a pulse outside of Tech. And, indeed, there is to look at the Nuclear/Uranium stocks, Crypto and Precious Metals. Positive action in stocks like Ingersoll Rand (IR – 88), Illinois tool (ITW – 258), Parker Hanafin (PH – 723), and Temkin (TKR – 79), also would suggest positive things for the economy.

Frank D. Gretz

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DJIA: 44,651

Tariffs… who saw those coming, again. Judging by the Market’s reaction Monday, few. Most had expected something more conciliatory. And what about the idea that it’s the market that makes the news, and in good markets like this one bad news is ignored. Perhaps in its way the market did make the news. It is a good market, but good to the point of having become a bit stretched to the upside. Couple that with tariff news that surprised – we give you Monday. Good markets do make the news – new highs in the A/Ds, the best 12-month new highs since last October, and a spike in stocks above the 200-day say it’s good. Add to that a Golden Cross in the S&P itself, the 50-day above the 200-day average.  While not always helpful for individual stocks, it has led to higher prices in the S&P 9 to 12 months later.

Monday may have proven a one-of. The 90-day pause on tariffs ended Tuesday with the announcement of tariffs of 50% on Copper and 200% on Pharmaceuticals. Markets yawned, even at the assertion there would be no further extension after the August 1 deadline.  Tariffs will be worse than expected at the start of the year, but markets seem skeptical there won’t be the usual backtracking. The equity-only-put-call ratio is back to levels seen around the February peak, meaning there is even some risk in terms of complacency. Meanwhile, the latest news did affect the sectors at risk, perhaps most noticeably Copper. An important commodity in many industries, Copper is now at an all-time high. A not so rare earth acting like one.

The big bad bill as some have called it, is it a shot in the arm or a shot in the foot? No bill would have meant the largest tax hike in history, and the stimulus part seems obvious. Certainly for now the market sees it as the former, and that’s what counts. Like Musk, however, one has to wonder how the deficits entailed will not prove inflationary. Time will tell, and at least for now that’s the key – there’s time. Meanwhile, part of the bill also involves considerable funding for ICE. Rounding up illegals also means rounding up a not so insignificant part of the labor force. It used to be said that inflation was always about wage inflation. Again, time will tell. Meanwhile, after having been much less of a worry, Bonds again are looking a little less benign.

Nvidia (NVDA – 164) hits the big $4T, very impressive. More impressive in a way Nvidia is now 7.5% of the S&P.  Throw in the rest of the MAG 7, you’re probably up to 40%. Wonder why they say the market is concentrated? To that we say deal with it, to a degree it is always that way – it’s called having leadership. There actually was a time when the concentration wasn’t in Tech but in Energy, if you can believe it. Energy now has a weighting of less than half that of Nvidia alone. Still there’s little question that the position of Nvidia and the rest of Tech has had an impact. There was a time when to participate in the stock market, you simply bought the S&P. Doing so now means you are buying a diversified group of Tech stocks, and some others. Then, too, for now it is Tech’s world.

The above notwithstanding, a not so techy Walmart (WMT – 95) looks just fine. And then there are the myriad of Financials from J.P. Morgan (JPM- 288) to the Regional Banks. Indeed, that’s the technically endearing quality of this market – most stocks act well, or at least well enough. When most days most stocks go up, good things happen. Just beware of the bad up days – up in the averages with poor or negative A/Ds.  Getting back to the news, the hits just keep coming. Good markets ignore bad news and all that, but the degree to which they do so is an indicator itself. It’s not always easy to recognize or appreciate, but when markets don’t react to negative news, there’s a message.

Frank D. Gretz

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DJIA 44,484

Change partners… and dance. Tuesday’s market certainly seemed to take heed of that Fred Astaire advice. It’s not that it was a bad day all together, A/Ds were nicely positive, it was a different day. It was a “sell your winners day,” likely an end of the quarter phenomenon rather than a durable change. And stocks like the Semis on average are up some 50% from their April low, deserving of a rest. Three important cyclical sectors made new highs last Friday – Technology, Financials and Industrials. This sort of leadership invariably leads to higher prices. However, nothing goes straight up, nor do they go from new highs to straight down.

Pity the poor fundamental analyst. Tariffs, inflation, deficits, war and pestilence, it’s hard to be bullish. Even the likes of Jamie Dimon and Paul Tudor Jones are worried, yet the market moves higher.  As for the economy, an economically sensitive stock like Parker Hannifin (PH – 712) broke out just the other day. The market’s driver as always is money. When we all wish we had more money to invest but we don’t, when the money is in, by definition that’s the top. Cash in money market funds is a guide, but a poor one. We have long noticed that when markets want to go up the money is always there, and all the sideline cash in the world doesn’t help when markets want to go down. The best guide to investable cash and whether it’s being put to work are those advance/decline numbers, stocks up and stocks down each day. It takes money to push most stocks up most days. So far so good.

Precious metals have been stellar performers all year. For Silver the best may be yet to come, at least it’s best month. While Silver’s July win rate is a seemingly not so spectacular 64%, up July’s have tended to be more up than down July’s down. SIL (49) & SILJ (15) are among the relevant ETFs.

Frank D. Gretz

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DJIA: 43,387

War is Hell… but good for the market? It depends on the market. So far so good for this market, and it was good for the market when Ukraine was invaded back in 2022.   After an initial downdraft, the market ended much higher the very day of the invasion. The two experiences, however, could not be more different, technically speaking. Back then the S&P already had dropped some 8% in anticipation of the well-advertised event. The weakness seemed to discount the invasion, and that proved so.   This time, the market was only a couple of percent below its all-time high. While markets were hardly unaware, markets were not weak in anticipation. Though not a complete surprise, the news was not discounted in terms of price. So, how is it that the two events so far have produced the same outcome? Could be it’s the market that makes the news.

When we said it depends on the market, this is what we meant. Technically good markets simply have good outcomes. We wouldn’t say there’s no bad news in even good markets, but much of the bad news gets ignored. Similarly, in bad or declining markets, have you ever noticed the news seems to follow price? There’s plenty of bad news, and often news that might have been otherwise ignored. In the scheme of things, the problem that remains is not one of war and peace, rather the problem that has plagued the market all along – uncertainty. An Iran – Israel peace almost seems an oxymoron. Hope springs eternal, but you know what they say about hope as an investment tactic. The far better guide is the technical backdrop, particularly those Advance/Decline numbers. When most days, most stocks go up, good things usually happen.

While the winners in all this are many and the losers few, there are some losers.  Most obvious, the good news has been bad news for Oil.  While we have no idea where Oil itself may go, oil stocks seem attractive on this weakness. To some extent the stocks were used as a hedge, take it from us, hence the reason for weakness. But with a market cap of only some 3% of the S&P there can’t be many real sellers left.  More importantly, the stocks have made lows. Components of the Energy sector ETF (XLE – 86) have cycled from 5% below their 50-day to more than 90% above. This kind of momentum shift typically proves important. Gold also could be in for a little hedge-end selling. Here the trend is simply so strong it should be temporary. Less clear are Aerospace/Defense stocks which also could see a temporary stall.  That said, an outbreak of peace won’t stop defense spending. The recent focus on European Defense shares misses the point that 70-80% of the spend there goes to US companies.

When it comes to Aerospace/Defense stocks, less familiar names like KTOS (41), AVAV (272) and HWM (177) have better charts than the more familiar Lockheed Martin’s (458). Yet the relevant ETFs, XAR (207) and ITA (184), are indistinguishable. Also interesting here, and perhaps even more timely, are the Cyber Security stocks. The ETFs here, CIBR (75) and HACK (86), are similarly indistinguishable, understandable as their top holdings are pretty much the same.  Meanwhile, if you’re looking for the next Microsoft (MSFT – 497), it could well be Microsoft. Other good charts among what we have called retro stocks — Oracle (ORCL – 213), IBM (292) and Dell (126), not to forget GE (251), the Industrial or Defense stock, you get to decide.

The many good charts alluded to above paint an attractive picture for the market as a whole. Still, they’re pretty much visiting in what is Tech’s world.  The S&P Technology sector and the NASDAQ 100 closed at new highs. While the strength has been obvious, this follows significant pullbacks. Specifically, the NASDAQ 100 cycled from a nine-month low to a one-year high, each time the index was then higher a year later, according to SentimenTrader.com.  The obvious cautionary note applies, studies like this, mean up but not straight up. Relevant ETFs are SMH (277) for the Semis, and IGV (109) for Software. You might also consider MTUM (237), Tech heavy but more diversified. It includes JP Morgan (JPM – 289) a Tech chart under the guise of a bank.

Frank D. Gretz

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