Friday, May 8, 2009

The Banks vs. Technology

I was going to put up a post about the recent negative divergence in technology, particularly the large cap technology companies that dominate the NASDAQ-100 (NDX), but I noticed that Cam Hui at Humble Student of the Markets already beat me to the punch yesterday morning in an excellent Weak Leadership Imperils Market Advance.

Interestingly, since Cam’s post, the divergence between financials and technology has accelerated as the banks have continued to rise in advance of and in response to the release of the stress test results, while large cap technology has been trending down since Monday.

So far the financials (XLF) have done a better job of leading the market up than technology stocks (XLK) have done of inspiring the bears. Until these two sectors start to move in unison, though, I suspect we will have a stalemate.

[source: BigCharts]


DISCLAIMER: "VIX®" is a trademark of Chicago Board Options Exchange, Incorporated. Chicago Board Options Exchange, Incorporated is not affiliated with this website or this website's owner's or operators. CBOE assumes no responsibility for the accuracy or completeness or any other aspect of any content posted on this website by its operator or any third party. All content on this site is provided for informational and entertainment purposes only and is not intended as advice to buy or sell any securities. Stocks are difficult to trade; options are even harder. When it comes to VIX derivatives, don't fall into the trap of thinking that just because you can ride a horse, you can ride an alligator. Please do your own homework and accept full responsibility for any investment decisions you make. No content on this site can be used for commercial purposes without the prior written permission of the author. Copyright © 2007-2023 Bill Luby. All rights reserved.
Web Analytics