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AVGO-2.75%  strong 20% gains are causing some outsized strength in the Semiconductor sector, despite Technology overall being lower today. SOX(Philadelphia Semiconductor sector) is up 2% but as can be seen, price has rallied to multi-day highs but remains at a key level of trendline resistance which will need to be exceeded before expecting a larger bounce out of this sub-sector which has been trending largely sideways since July. As can be seen on this daily SOX chart, the early strength failed right at 5185 and this is an important area for the Semis which when exceeded, would suggest a larger upside rally for this group. This would be further helpful to Technology which has already shown some good outperformance since the beginning of December.

Heading into Europe's close, we see a moderate rally in US Equities that has been largely disguised by weakness in AAPL-2.99%  which is falling by the most it has in a month. While Equal-weighted S&P 500 did rise to a record high today early in trading before giving back some of these gains, 10 of 11 sectors are higher today on an Equal-weighted basis, with only Technology being dragged down. This Tech weakness isn't as apparent when eyeing RSPT-1.97%  which is just lower by -0.26% but XLK-2.25%  is down -0.67% as AAPL along with SKYW-0.43% , QRVO-1.29%  MU-0.43% , TER-2.37% , and AVGO-2.75%  are all down more than 3%. Thus, Semiconductors are down, but the broader market is acting fine, with Financials, Energy, REITS and Utilities all higher by more than +0.50% and even Healthcare is up by +0.47%. Overall, it's important to recognize that the US stock market is made up by more than just AAPL-2.99% , but Technology's negative performance today is dragging down the major US Benchmark indices like SPX and NASDAQ, while DJIA is positive, DJ Transportation Avg is positive and RSP-1.41%  is higher by over +0.30%.

Today's mild pullback in SPX and QQQ is nearly entirely large-cap Technology driven, as weakness out of SMCI1.84% , MU-0.43% , AMAT-3.26% , AVGO-2.75%  of 3%+ has caused XLK to lose 1% while most other sectors are positive. On an Equal-weighted basis, Technology is the only down sector and Advance/Decline is nearly 2/1 positive, with gains of more than +0.50% out of Real Estate, Utilities and Staples. Both US Dollar and Yields are up fractionally, but otherwise, a rather slow start to the final week of August. Note, NASDAQ has not pulled back under the lows from late last week. As seen in this hourly chart of NASDAQ futures, under 19542 would result in a move to 19365 most likely which would prove to be strong support and a good risk/reward ahead of NVDA-2.70%  earnings on Wednesday. Overall, most of the market working fine today despite some minor Tech weakness and both Equal-weighted S&P 500 (RSP-1.41% ) along with Russell 2k (IWM-2.63% ) etfs are both positive this morning.

2 hours into trading, we see S&P has just surpassed yesterday's intra-day peak (ES-0.63% _F- 5616) by S&P Futures which has helped this rally to accelerate. Breadth is just mildly positive, and Financials and REITS are the only two sectors higher today on an Equal-weighed basis, Technology is largely flat, but XLK is up +0.28%, powered higher by a near-4% bounce out of CRWD-3.48% , along with AVGO-2.75% , FSLR-1.66% , NOW-2.16% , and PANW-0.02% , all which are higher by more than 2%. Software stocks are leading Semis today, and NXPI-1.03% , ON-6.66% , and TXN-1.24%  are all lower by more than 3%, and SOX is lower by -0.85% at a time when XLK is outperforming. Transports are lower by 1%, but Small caps are showing stellar strength, up by 1% (IWM-2.63% ) as the SummerOfSmallCaps has arrived. Both US Dollar and Treasury yields are pulling back from earlier bounce attempts, TNX still down -0.02bps - Target initially for S&P Futures lies near 5721