Few Tech Stocks Above Average

Ever since we got the latest speculative frenzy into late January / early February, we've been watching for signs of an interior breakdown in the major averages. For the most part, it's been in vain. There have been isolated days with odd divergences here and there, but nothing consistent.

That's still the case, though more and more curiosities are starting to pop up. Today, for example. The data are still preliminary, but the S&P 500 Information Technology sector is poised to close at a new high. Yet Bloomberg is showing that fewer than 50% of its member stocks are above their 10-day moving averages and fewer than 60% are above their 50-day averages. The only other days that has happened since 1990 are October 26 and 29, 2007.

If we forget about the short-term averages and just look for an Info Tech new high with fewer than 60% of members above their 50-day, this is what we get.

Essentially, every signal preceded weakness, or a very minimal gain at best, over the next 2-8 weeks.

It wasn't much better for the broader S&P 500 index.

This isn't yet "official" and stocks have a chance to catch up into the close. If they don't, it will trigger troubling precedents and throw some water on that big breadth turnaround from Monday.