It’s seven weeks after May 1 and the stock market continues to lose ground.

Let’s take a quick look at the SPDR S&P 500 ETF (NYSE: SPY) hourly chart covering the month of June. The price is still falling but every couple of trading sessions we get some big money players nibbling on stocks, accumulating shares and running the market higher. This is typically an early signal that the market is trying to bottom.

The two key ingredients for a higher stock market have been missing from the mix for a couple months. These two key sectors which have a significant weighting in terms of the broader market are the financial and technology stocks.

Let’s take a look at the financial sector. As you can see on the bottom of this chart of the Financial Select SPDR (NYSE: XLF), financials started to lag the market in late January. Since then the sector has been in a strong downtrend pulling the broad market averages lower with it. The good news is that this sector has just reached a major support zone and is looking ripe for a bounce and possible rally.

The other main ingredient to a higher stock market is the technology sector. Here we can use the Technology Select SPDR (NYSE: XLK) to see this sector has been pulling back for several weeks. These stocks are trading down at a major support zone and look oversold. A bounce from this level is very likely in the coming week.

Weekend Trading Conclusion

I continue to feel the market is trying to bottom here and we are at the tipping point when things get volatile and choppy just before we get a trend reversal in the S&P 500. Keep an eye on the short term charts of financials and technology sectors. Once they start making higher highs and higher lows on the 60 minute charts I believe it will be the start of a nice bounce and possible rally.

Get my free weekly technical analysis on sectors here: https://www.thegoldandoilguy.com/trade-money-emotions.php