IBM (NYSE:IBM) led a technology stampede yesterday following Big Blue’s better-than-expected earnings. Even though a bevy of economic reports — including existing home sales, Philly Fed and leading indicators — all missed the mark, the earnings from the techs drove the market higher. IBM gained 3.8%, Qualcomm (NASDAQ:QCOM) rose 4.3%, eBay (NASDAQ:EBAY) was up 8.6%, and F5 Networks (NASDAQ:FFIV) gained 4%.

At the close, the Dow Industrials were up 35 points at 12,943, the S&P 500 rose 4 points, closing at 1,377, and the Nasdaq climbed 23 points to 2,966. The NYSE traded 755 million shares and the Nasdaq crossed 455 million. On the Big Board, advancers exceeded decliners by the thin margin of 1.1-to-1, and on the Nasdaq, decliners were ahead by 1.3-to-1.

The S&P 500 continued marching higher with help, as noted, from the technology sector. The pharmaceutical sector provided support, as well, with some of the big names that have languished for years — like Pfizer (NYSE:PFE), Merck (NYSE:MRK) and Bristol-Myers Squibb (NYSE:BMY) — finally breaking to new highs. The Health Care SPDR (NYSE:XLV) is a conservative way to invest in the group. The next target for the 500 is the closing high of May Day at 1,405 since it topped the July 3 closing high of 1,375.

The DJIA moved ahead, as well, but despite the supporting buy signal from the MACD, it still has not broken the June closing high at 12,944. Although the chart is bullish, it is not nearly so positive as the S&P 500, and that is surprising in light of the pure blue-chip makeup of the index. One answer could be that the market still is predominantly in the control of traders with the institutions and the public on the sidelines.

While the focus of attention has been on the techs and fast movers, the Dow Transports have done nothing. This fact is one of the few negatives, along with low volume and weak breadth. But to a Dow Theorist, the lack of follow-through by the DJT is a “non-confirmation,” and that could be a strong negative. Not only have the transports failed to break out, but yesterday their 50-day moving average crossed down through its 200-day moving average — a sell signal. And the MACD is overbought.

Conclusion: Despite the focus of Dow Theory followers on the non-confirmation of their two key indices, the broad market is bullish. However, yesterday’s rally was restricted mainly to just several sectors rather than being broad-based. When this occurs following a breakout, it almost always means that a slight correction is due. For those who missed the gains of the last several days, this could provide entry points that they thought they missed. Buy into weakness but look forward to a slowdown in the advance and focus on the sectors and groups that are moving ahead, like technology and pharmaceuticals.

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.