📈 Rotation Is Working: Three Bullish S&P 500 Setups
The S&P 500 must now leverage the three bullish patterns that have taken shape over the last few weeks. Sector rotation has allowed the index hit new marginal new highs. It must now take the next step and follow through.
📊 Bullish Patterns Are Expanding
One of the most important developments is the breadth of bullish formations across indices, ETFs, and sectors.
That type of expansion typically improves the durability of the broader trend and creates more opportunity.
⚙️ Industrials (XLI): Leadership Outside of Mega-Cap Tech
Industrials continue to stand out as a leadership group, reinforcing the idea that this is not a one-sector market. Short-term, XLI just hit a pattern target and may need some time to digest the latest rally.
💻 Technology (XLK): Two potential bullish patterns
Technology has shifted from leading aggressively last year to digesting prior gains, but the key point is that trend structure remains intact. Two potential bullish patterns remain in play.
🛍️ Consumer Discretionary (XLY): Risk Appetite Remains
XLY and the equal weight RSPD ETFs both are in breakout mode right now, showing that the comeback has more than just TSLA and AMZN.
🏦 Financials (XLF): Pausing After Leadership
With XLF getting hit hard on Tuesday after the first round of earnings, it must hold support now.
How this group resolves from here will be important, but for now, the bigger pattern breakout remains intact.
⛽ Energy (XLE): Relative Strength Tells the Real Story
XLE Energy’s absolute chart is constructive, but the real insight comes from the relative view.
The XLE vs. S&P 500 (SPX) ratio has been especially revealing, showing improving relative strength even during periods when the broader index has pushed to new highs.
Relative strength like this can often precede sustained leadership. We’ve seen this happen during two distinct periods over the last 25 years.
▶️ Watch the full video for the complete chart breakdown.
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