S&P 500 ENDS WEEK AT NEW RECORD -- TECHNOLOGY STOCKS CONTINUE TO LEAD -- SO DO CONSUMER DISCRETIONARY STOCKS -- ESPECIALLY STOCKS TIED TO HOUSING

S&P 500 HITS NEW RECORD ON FRIDAY... The S&P 500 hit a record close on Tuesday and on Friday exceeded its February intra-day peak at 3393 to confirm a new all-time high as shown by the weekly bars in Chart 1.   The Nasdaq hit another record as well.   That leaves only the Dow Industrials still trading below their February peak.   Breadth figures, however, weren't as impressive with declining stocks on the big board and Nasdaq outpacing advancing stocks by a 2-1 margin.   And as has been the case through much of the market's recent rally, technology stocks were the Friday's biggest gainers with the Technology SPDR (XLK) gaining 1.27% while hitting a new record.   Apple's Friday gain of 5.1% led both the Dow and S&P 500 higher.  Although continued strength in the largest tech stocks has continued to pull the market higher, it has raised concerns that the market advance is too dependent on a relatively few megacap tech stocks.   The top five tech stocks now account for half of the Nasdaq 100 (QQQ) and a quarter of the S&P 500.    That's a lot riding on those tech winners continuing to advance.   But technology isn't the only group that's hitting new records.   Housing stocks also had a very strong week and set new records as well.

HOUSING-RELATED STOCKS HAVE ANOTHER BIG WEEK... Consumer Discretionary stocks were the week's second strongest group and also hit a new record.   And that was mainly due to strength in the housing sector.   Home sales surged to a new record during July while sales of previously owned homes jumped 24.7%.   Record low mortgage rates have had a lot to do with the surge in homebuying as well as a general flight from large cities to safer and more spacious homes in the suburbs.   The weekly bars in Chart 2 show the S&P Homebuilders SPDR (XHB) hitting a new record this week.   So did their relative strength ratio in the upper box.   This isn't a new trend.   The XHB exceeded its February high four weeks ago and continues to build on that bullish breakout.   The U.S. Home Construction iShares (ITB) which is composed mainly of homebuilding stocks is doing even better.  That includes DR Horton (DHI) and Lennar (LEN) which hit new records on Friday. I'm using the XHB here because it includes a wider variety of stocks tied to housing including home improvement stocks which are also hitting new records.    That includes Home Depot, Lowes, Masco, and Mohawk as well as homebuilders.

CONSUMER DISCRETIONARY RECORD...Consumer Discretionary stocks were the week's second strongest sector.   The weekly bars in Chart 3 show the XLY hitting a new record as well.  As already mentioned, homebuilders were its strongest group for the week.   They were followed by broadline retailers led by Target (TGT), footwear led by Nike (NKE), and home improvement stocks led by Lowes (LOW) all of which hit new records.   It's encouraging to see that economically-sensitive stock sector hitting new highs along with technology.   Chart 4 shows Nike (NKE) having recently broken out to a new record high after clearing a "neckline" drawn over its January/June highs. .

SECTOR RECAP... Six sectors gained on the week including technology, consumer cyclicals, communications, staples, real estate, and healthcare.  Five losers were energy (-5.6%), financials (3.4%) , utilities (-1.5%), industrials (-1%) and materials (-1%).   Energy and financials had an especially soft week.  Low bond yields continue to weigh on banks and the financial sector.   While selling of crude oil later in the week weighed on energy.    A midweek rebound in an oversold dollar also contributed to some profit-taking in precious metals which remain in long-term uptrends.  Chart 5 shows gold pulling back toward rising trendline support and its 50-day moving average (blue line).