MAJOR STOCK INDEXES ARE HEADED FOR TEST OF SUMMER HIGH -- STRONG TECH SECTOR IS PUTTING THE NASDAQ IN THE LEAD -- MICROSOFT HITS NEW RECORD TO LEAD MARKER HIGHER

MAJOR STOCK INDEXES NEAR SUMMER HIGHS...Major U.S. stock indexes are trading higher today and approaching a test of their summer highs.  Chart 1 shows the Dow Industrials continuing its bounce from yesterday afternoon and maintaining its bullish bias.  Chart 2 shows the S&P 500 doing the same.  Both indexes remain well above underlying chart support along their 50-day averages (blue lines).  Chart 3 shows the Nasdaq Composite also continuing its September rally.  Although it's the furthest from its July high, the Nasdaq is today's biggest percentage gainer.   That's due mainly to a strong technology sector and one stock in particular.

MICROSOFT LEADS TECH SECTOR HIGHER...With ten sectors trading higher today, technology is the biggest percentage gainer.  [Energy is the only loser].   Chart 4 shows the Technology Sector SPDR (XLK) trading 1.00% higher on the day after bouncing off its 50-day average yesterday (blue arrow).  It's now nearing a test of its September high.  The upper box shows the XLK/SPX ratio in a sideways consolidation formation since July, and appears ready to resume its uptrend.   Software is leading the tech sector higher; and that group is being led higher by the tech sector's biggest stock.

Chart 5 shows Microsoft (MSFT) rising more than 2% today to reach a new record.   The MSFT/XLK ratio (upper box) just bounced off its July low (see arrows) and is starting to rise again.  That's a good sign for the XLK and rest of the market.  Microsoft is also the biggest gainer in the Dow today.   After some early selling yesterday afternoon following the Fed rate cut, the stock market has regained its footing; and a test of its summer high appears imminent.   Small cap stocks are also having a relatively strong day.