Technology continued to be the deciding factor for the major averages this past week. But for all their swings, the end result was pretty underwhelming.

The SPDR Information Technology ETF (NYSEARCA:XLK) finished the week down just a little more than 1%. The SDPR S&P (NYSEARCA:SPY) ended off 1% and the Nasdaq 100 (NASDAQ:QQQ) closed down 1.1%. Five of the S&P sectors closed out the week higher, with six lower. 

A hallmark of the ultimately bearish action of Wednesday, Thursday and Friday was that when the megacap sectors lost early gains, the money didn’t rotate enough for other sectors to take the leadership. 

But another look at where things stood by the closing bell on Friday shows signs for encouragement that cyclicals can break out from their ennui. 

The SPDR Industrial Sector ETF (NYSEARCA:XLI) rose 1.5% last week. It was the second-best performer behind the SPDR Energy ETF (NYSEARCA:XLE), which jumped 3% as crude rebounded above $40 and Saudi Arabia’s oil minster threatened short-sellers

In the past month, XLI is up a modest 2.64%. But that puts it ahead of fellow cyclicals Financials (NYSEARCA:XLF), up 0.33%, Energy, down 10.35%, and, surprisingly, Consumer Discretionary (NYSEARCA:XLY), although that’s taken an outsize hit from a correction-size drop in Amazon.

XLI has had a steady rise since it climbed above its 200-day simple moving average on August 6, rising 7%. Its relative strength index remains in the low 50s, well off overbought territory.

“We know this is a sector that’s been underperforming the market for three years,” Tony Zhang, chief strategist at OptionsPlay, told CNBC. “But since the March lows it’s been breaking out of its bottoming formation and just (Friday) it broke out of that bottoming formation. This signals to me a potential end to this underperformance for industrials and (we) potentially start to see a rotation into this sector.”

GE (NYSE:GE) led industrials, jumping 15.6% for the week. CEO Larry Culp said he expects free cash flow will turn positive during this year’s H2, and set the stage for positive cash flow in 2021.

GE rose above its 10-, 50- and 100-day SMAs last week.

But JPMorgan analysts Stephen Tusa said the guidance “sounded to us like more of the same, with a ‘bad today, but better tomorrow’ message, but with little tangible evidence of recovery across the businesses.”

Following GE was boilermaker A.O. Scott (NYSE:AOS), rising 9.1%. The stock tested its 100-day SMA last week and has been on a tear since rebounding above its 50-day SMA.

Under the Radar

While crude’s rebound stole the headlines in the energy sector, the VanEck Vectors Coal ETF (NYSEARCA:KOL) more than doubled XLE’s weekly performance, up 6.3%. 

In the past month, coal is one of the few energy subsectors in the green.

Coal futures (XAL1:COM) rose 8.4% in the last five trading sessions.

South Korean coal prices hig.h a three-month high yesterday, with five nuclear reactors shut because of two typhoons.



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