Last week, we highlighted the failed breakdown in Technology ($XLK) relative to the S&P 500 ($SPY). Since then, XLK has rallied nearly +8% to close out the week.
This kind of pattern has been a hallmark of the broader bull market — breakdowns that don’t stick often lead to sharp reversals higher.
So the question now is: are we witnessing the start of another leg of outperformance from tech?
On a relative basis, it looks promising. But on an absolute basis, the picture is more nuanced.
XLK has surged +25% over the past month in a near-vertical move — and it’s only now running into potential resistance. A pause here to digest recent gains would be perfectly normal.
While the recovery in U.S. markets has been impressive, chasing strength at these levels isn’t our preferred play.
Instead, we’re watching closely to see how key indices react to what appear to be critical resistance zones.
