More sector rotation and strong rallies on the other side of the world

Sector rotation continues as tech stocks significantly underperform for the first time in months. Meanwhile, equities in India surged to all-time highs. 

After financial stocks languished for months, the vaccine news gave many financial stocks a much-needed jolt and pushed them above their upper Bollinger Bands.

When so many financial stocks jumped, the S&P 500 financial sector usually performed poorly over the next few weeks. However, this was not a concern over the next 6-12 months:

Thanks to sector rotation, Tuesday's surge pushed the % of NYSE members at a 52 week high to levels last reached before stocks crashed in March.

When this figured crossed above 10% for the first time in more than 6 months, the S&P 500's forward returns were mixed on every time frame:

Similarly, the % of stocks at a 52 week high - % of stocks at a 52 week low jumped to the highest level since before stocks cratered in March:

Once again, this led to mixed returns for the S&P 500 going forward:

On the other side of the world, Indian equities are surging to all time highs. The % of Nifty 50 members above their 200 dma has surged to the highest level in almost 3 years:

Such strong momentum usually saw Indian equities take a short term breather:

Looking at this from a different angle, the % of Nifty 50 members that are overbought surged to the highest level since March 2019:

The last 4 times this happened, Indian equities made a short term pullback. But beyond that, this was not a very effective bearish sign for the Nifty 50:

And finally, the % of Nifty 50 members above their upper Bollinger Band surged as well:

This mostly led to mixed returns for the Nifty 50 going forward: