$SPX Rebounds, Tech Loses Leadership, and Sector Rotation Takes Center Stage
The $S&P 500(.SPX)$ closed at 7,584.3 (+0.4%) after bouncing from the confluence zone of the 7,520 weekly level and the 7,515 daily level. The first validation of the bounce came at 10:00 AM with the recovery of the 7,534 daily level, followed by a move over the 7,559 central weekly level around 11:00 AM, establishing a bullish milestone that was consolidated when the central daily level of 7,570 held for the remainder of the day.
These key levels were highlighted in yesterday’s Market Update (access here), alongside the potential bounce for $Alphabet(GOOG)$ and $Amazon.com(AMZN)$ . Both tech giants validated the bearish setups anticipated in the Weekly Compass, but became deeply oversold following steep declines from their respective peaks. In fact, both securities were oversold relative to their Bollinger Bands, as detailed in last night’s premium content.
Healthcare led the market with $Health Care Select Sector SPDR Fund(XLV)$ gaining 3.1% on strong bullish conviction, followed by financials ( $Financial Select Sector SPDR Fund(XLF)$ +2.6%) displaying structural strength, and real estate ( $Real Estate Select Sector SPDR Fund(XLRE)$ +2.0%) adding further momentum. Capital clearly rotated into value and cyclical sectors to drive the tape.
On the downside, technology ( $Technology Select Sector SPDR Fund(XLK)$ -1.6%) managed to close with a green candle by recovering off its lows; it filled its daily gap but fell short of positive territory. Consumer staples ( $Consumer Staples Select Sector SPDR Fund(XLP)$ -0.1%) reflected sector indecision, while materials ( $Materials Select Sector SPDR Fund(XLB)$ ) printed a neutral doji, which provides little encouragement for $SPDR Gold ETF(GLD)$ and $iShares Silver Trust(SLV)$ .
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