All major U.S. stock indices finished in positive territory last week except for the small-cap Russell 2000, which lost 0.1% and is up just 0.8% this year. On the other end of the spectrum, the tech heavy Nasdaq 100 — which has powered the 2014 broad market advance — gained 0.6% and is up 18.4% year to date.

From a sector standpoint, previously downtrodden energy and materials led, which suggests that cyclical sectors may be making a comeback. If this is indeed the case, it bodes well for a strengthening global economy as we head into 2015.

#-ad_banner-#Also significant is the recent recovery in European equity prices, which had previously been a drag on U.S. performance, as I discussed in the Oct. 13 Market Outlook. As long as European stocks remain strong, which my analysis suggests is likely at least in the near term, it will help support further strength here in the States.

Technology Continues to Lead Market Higher

In last week’s Market Outlook, I said Cisco Systems’ (NASDAQ: CSCO) mid-November breakout targeted a run to $32 in the stock and also signaled more strength to come in the market. CSCO rose as much as 2.8% last week, hitting a high of $27.05 on Friday.

Another indication of additional strength in technology issues, which tend to lead the broader market both higher and lower, can be seen in the PHLX Semiconductor (SOX) Index. SOX is trading at its highest level since June 2001.

It clearly broke overhead resistance at the $642 March 2002 benchmark high, following a few unsuccessful attempts earlier this year. This breakout paves the way for a move to the next important resistance level at the $711 May 2001 high, which is 7.3% above Friday’s close.

Housing Breaking Out as Expected

Last week, I covered the PHLX Housing Sector (NASDAQ: HGX), which was leaning higher in front of three housing-related economic reports — the Housing Market Index, housing starts and existing home sales. I said HGX’s configuration of static supply around $210 amid rising demand since August 2013 suggested an eventual bullish breakout above $210 that, once confirmed, would target a rise to $250.

The breakout I expected took place on Friday. Shares finished the week up 3.2%, with an additional 17.1% rise to go before hitting my target.

The $210 area now becomes important support that should loosely contain prices on the downside for the $250 target to remain valid. October new home sales are scheduled to be released on Wednesday.

History Says Interest Rates Will Rise Into 2015

In the Nov. 10 Market Outlook, I pointed out the importance of the 2.4% level on the yield of the benchmark 10-year Treasury note. It had become resistance after acting as an obstacle to lower yields back in late August. That day, yields closed at 2.38%, and they have since drifted lower, closing at 2.31% on Friday.

However, a 57-year seasonal pattern suggests that 2.4% will eventually be exceeded as long-term U.S. interest rates rise into the early part of next year. The next chart shows that November is the second weakest month of the year in yields based on data since 1957.

The seasonal trend shifts toward rising yields in December, and gradually strengthens into the March and April peak.

This chart indirectly suggests improving economic growth into early next year, as rising long-term interest rates represent a bet by the bond market that the Federal Reserve will no longer need to artificially stimulate the economy.

Base Metals Continue to Establish a Bottom

For almost two months, I have been monitoring what appeared to be an emerging bottom in base metal prices and PowerShares DB Base Metals ETF (NYSE: DBB), which I discussed here and here.

Prices gapped above the ETF’s 50-day moving average, a widely watched minor trend proxy, on Friday. This followed three successful tests of major support at the 200-day moving average, a major trend proxy, between early October and early November.

Price gaps indicate near-term bullish conviction, and this one suggests that a significant bottom is in place at the recent lows. If this is indeed the case, the 50-day moving average at $17 should now loosely contain DBB on the downside as it moves toward an eventual retest of the $18.14 Sept. 8 high, which is 5.7% above Friday’s close.

Putting It All Together

The recently established new highs in the market-leading Nasdaq 100 and PHLX Semiconductor indices, amid low volatility, a strengthening housing sector, bottoming base metal prices and the prospect for rising long-term interest rates through April, collectively suggest an improving U.S. –and global — economy that should support continued strength in equity prices into early next year.

Editor’s note: As we head into the end of 2014, there’s a little-known indicator that identified four of the year’s best stocks. And it generated an average gain of 109% on those positions. It just found 10 more stocks flashing the same buy signal as last year’s top picks. These could be some of the best stocks to own in 2015. Click here to get the name of one of these top picks in a free research report.

This article originally appeared on ProfitableTrading.com: Bulls Have the Green Light Into Early 2015