The market has been sending investors mixed signals lately.
Some areas are showing strength, while others are clearly struggling, leaving the tape looking bifurcated.
But here’s the key takeaway: for the market to experience a meaningful correction — or even flirt with the idea of a bear market — most stocks need to be moving lower.
That simply isn’t happening right now.
Even the short-term new lows lists haven’t expanded.
Mathematically, a correction can’t occur without a broad drop in stocks.
That’s the bullish signal I’m seeing today.
Groups like Energy, Regional Banks, Industrials, Transports, Materials are all holding up well.
So where does the risk lie?
For me, it starts with Technology.
Rotation out of growth has been sharp. Software has been crushed, speculative tech is rolling over, and Bitcoin just suffered a major hit.
The real question is whether weakness in tech spreads to other areas.
If tech continues to falter, it could start weighing on even the sectors that have been holding up, testing the broader market’s resilience.
And that’s why keeping an eye on these leaders is so important.
How sustainable is it for the broader market if its leaders continue to underperform and lose ground?
These are the MVP stocks. If they struggle for too long, it’s hard to imagine the rest of market maintaining its momentum.
Let me know what you think — I’d love to hear your take.
And if you missed yesterday’s 2 PM call with Steve, you can watch the 35-minute replay to see why stocks drop after “good” earnings, our 3-step trade checklist, and the options setup we favor for earnings.
