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The Technology ETF (XLK) surged to its mid August high and formed a bearish engulfing. Resistance in this area is also marked by broken support. The bearish engulfing has yet to be confirmed though. Look for further weakness below 24 to confirm.


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Looking for stocks that are still in favor? Just mosy over to the pre-defined scan page for a look at the stocks making fresh 52-week highs. There were over a dozen in the Nasdaq and over three dozen on the NYSE. Hot Topic (HOTT) hit a new high after advancing 10 of the last 12 days.


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The Sector Carpet shows the finance sector leading the way higher with an aveage gain of 4.2%. Color-wise, this sector shows lots of dark green, which means many stocks were up sharply. The consumer discretionary was second with an average gain of 3.5%. On the live carpet, users can hover over the squares to see the percent change and right click on the mouse for more options.


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The Euro Currency Trust (FXE) seems to like what it heard from Fed Chairman Bernanke – and the Dollar did not like it. After dipping below 143 in the morning, FXE surged above 144 by mid day. The ETF is still just shy of a breakout. Look for a move above the July-August highs to break resistance.


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Thursday’s announcement that Warren Buffet will invest $5 billion in Bank of America (BAC) sent the Finance SPDR (XLF) sharply higher on the open. XLF opened above 13 and surged above 13.2 in the morning. These gains quickly evaporated as sellers returned. This failure reinforces resistance from the mid August high. Follow through above this level is needed before taking any surge too seriously.


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The Investment Grade Corporate Bond ETF (LQD) tumbled for the third straight day and broke below its August low. This ETF formed a lower high in late August as the 20+ year Bond ETF (TLT) formed a higher high (red line chart). Investment Grade Corporate Bonds are weak relative to Treasuries this month.


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Best Buy (BBY) is attempting to base with several bullish candlesticks over the last two weeks. Most recently, a Harami is taking shape on Monday-Tuesday. Prior to this, BBY formed a Hammer on Thursday and an Inverted Hammer on Friday. None of these candles has been confirmed yet. Look for a break above consolidation resistance for confirmation.


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After lagging gold the entire year, the Gold Miners ETF (GDX) is trying to play catch-up with a surge to resistance. The December 2010 and April 2011 highs mark resitance here. Overall, GDX has been stuck in a range since October 2010 and a move above resistance would break this range.


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After holding their own until late July, stocks joined oil and the Dollar with a move lower. The chart below shows the US Treasuries Continuous Futures ($USB) and Gold Spot ($GOLD) trading at six month highs. In contrast, Light Crude Spot ($WTIC) and the S&P 500 hit six months lows this month. The US Dollar Fund (UUP) remains above its June-July lows, but is definitely not showing any strength.


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The Shanghai Composite ($SSEC) peaked in November 2010 and hit a new 52-week low in August 2011. As the S&P 500 moved to a new high in April-May 2011, the index formed a lower high in mid April. A support break and 52-week low followed in the next few months. Relative weakness and a 52-week low in this key index are bearish for global equities.


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