Photo by stu99

Last week was one for the record books - on both sides of the market, no less. Between record volatility crushes and one of the biggest one-day rallies in history, both bulls and bears are left scratching their heads asking, “Was that it?”

I’m going to be completely up-front here and say that we have not gotten the “all-clear” for stocks just yet.

But in the near-term, the sector performance rankings are telling an interesting story. If it can continue, great, but if some of the older trends continue, there’s still more pain ahead. 

Here’s what I mean…

Getting On-Base Isn’t the Same as Scoring

Over the past couple of months, I’ve commented on the need for technology to emerge as a leading sector in this market. Remember, tech makes up around 30% of the S&P 500, so without its participation to the upside, this market isn’t going anywhere anytime soon.

But after last week’s drama and subsequent rebound, we saw the tech sector storm back. And within the tech sector, we saw semiconductors outperform even more to the upside.

This is an encouraging sign in the near-term, but as you can see, the rest of the sectors on the leaderboard are still very defensive in nature.

We’re not out of the woods yet, but if tech can keep its momentum up, things could get interesting. A swing long here and there can’t be ruled out in this tape, but know fully that the script could flip again very quickly. Bulls still have a lot of work to do.

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