The week ending April 24 delivered a technically rich but internally divided market.
$Dow Jones(.DJI)$ and $S&P 500(.SPX)$ consolidated as anticipated in the previous Weekly Compass, with the SPX filling its gap at $7,051.2 as likely considered. Tech $NASDAQ 100(NDX)$ surged +2.4% for the week, and the semiconductor sector printed a +9.1% breakout reaching unprecedented overbought conditions that we will study today.
The Three Green Soldiers pattern on the SPX and NDX weekly chart mentioned last week is in bullish play, and Bitcoin continues moving north since it was anticipated three weeks ago. The cryptocurrency has gained +13.7% since, and Ethereum +9.9%.
But beneath the surface, a different story has been developing.
The stock participation has decreased from 78% to 59% over four sessions while the SPX moved higher. Fewer than 53% of stocks are above their 50-day average. The rally that carried the index was not a broad market recovery.
It was a semiconductor event, with $Intel(INTC)$ $Texas Instruments(TXN)$ $Micron Technology(MU)$ $Advanced Micro Devices(AMD)$ $Broadcom(AVGO)$, and $VanEck Semiconductor ETF(SMH)$ doing the heavy lifting with weekly moves above 9% each, while software names ( $ServiceNow(NOW)$ $Adobe(ADBE)$ $Oracle(ORCL)$ $Palantir Technologies Inc.(PLTR)$) collapsed or yielded gains respectively.
The financial sector leadership ( $JPMorgan Chase(JPM)$ $Visa(V)$ $Berkshire Hathaway(BRK.B)$) deteriorated. That divergence is the defining tension entering the most important earnings week of 2025: $Alphabet(GOOG)$ $Microsoft(MSFT)$ $Amazon.com(AMZN)$ $Meta Platforms, Inc.(META)$ $Apple(AAPL)$ all report.
Will semiconductors consolidate next week? Can the ‘Magnificent Five’ deliver the bullish results the market expects? Will non-tech sectors continue their decline, or can Software stage a recovery?
Comments