It was the best of times, it was the worst of times... During the month of October, the Technology and Financial sectors took two divergent paths. Financials rose 1.81% while Technology fell 6.81%. As shown in our trading range charts of the two sectors below, the Financial sector remains above its 50-day moving average and in a nice uptrend. The Technology sector is in extreme oversold territory at more than two standard deviations below its 50-day.
You can see the divergent paths between Tech and Financials in relative strength charts (vs. the S&P 500) as well. As shown, aside from a brief bounce during the summer, Tech has now been underperforming the overall market significantly since the end of the first quarter. The Financial sector has been outperforming for a large majority of the year.