TechnicaJ focus

• The new all-time highs recently reached by the utilities and financial sector indexes are probably a positive major-trend sign, but they don’t rule out interim stock-market weakness. Sentiment and speculative-activity measures probably need to improve further before a full-fledged’tnarket advance can begin. 4! Besides the positive implication of the utilities and the financial indexes’ new highs, we have often noted that the general market ( excluding technology issues) has been in a bear cycle since the spring of 1998 or earlier. It now appears to be in a gradual or rotational bottoming process from a major oversold condition. • The market recently responded positively to the short-term momentum indicators’ oversold condition of late July with a moderate, albeit selective, rally. With those indicators now near overbought positions, further short-term upside potential appears to be limited. Although the DilAmight make a new recovery high in the 1100-to-11500 area, the technology-heavy