Technology (XLK) has clearly been leading the SPX higher, but it is now very overbought. The RSI has now entered shaded overbought territory. We haven’t seen price this overbought since the crash at the beginning of September. In September price was accelerating its ascent, just as it is now. Note that the rising bottoms trendline is getting more steep. The PMO is getting overbought, albeit not as overbought as September. The problem I have is the small cracks in the indicators. The BPI nearly had a negative crossover today. The SCI topped today and you can see that participation is beginning to turn down even as price continue higher on a steep rising bottoms trendline.
Conclusion: I’m not saying it’s over for XLK, I’m just noting that indicators are not confirming this new all-time high. Could be dangerous. Don’t miss our special below if you haven’t subscribed yet!