The weight of the evidence remains bullish for stocks, but several tech groups are showing relative weakness here in June. Semiconductors are still strong with new highs again on Monday. However, SMH and SOXX are very extended and ripe for a rest. Tech is the biggest sector in the S&P 500 and semis are the biggest industry group within tech. The market is very dependent on one group right now. $SPY $QQQ $IJH $IJR $XLK $AIQ $DTCR $SMH $SOXX $XLI $XLF $XLU $XLV $KRE $KBE $IAI $ITA $IFRA $XBI $IBB

The weight of the evidence has been bullish since the early April surge. Despite disruptions in the Middle East, high oil prices and rising interest rates, stocks stayed bullish throughout April-May and remain bullish here in June. Clearly, the stock market is looking past current events, as it always does. $XLK $SMH $SOXX $AIQ $DCTR $XLI $ITA $XLB $IFRA $IBB $XBI

Today’s report will focus on the Mag7 ETF and Semiconductors ($MAGS, $SOXX, $SMH). Hyperscalers drive AI spending and semiconductors are the main beneficiary. MAGS shows relative weakness and the semiconductor ETFs are extremely stretched. Keep in mind that semiconductors account for 48% of the Technology SPDR and tech accounts for 37.26% of SPY.

There are signs of money is moving into groups related to the finance and healthcare sectors. The Finance SPDR, Broker-Dealer ETF and Bank ETFs are breaking out with strong moves the last five days. Within healthcare, the biotech ETFs are setting up with bullish consolidation patterns. Even the lowly Medical Devices ETF is perking up with a double bottom and an bullish Aroon cross. $XLF, $IAI, $KRE, $KBE, $ITA, $IHI, $XBI, $IBB

SPY and QQQ fell sharply on Friday with outsized declines. The 1-day percentage losses were the highest since January, scene of another character change. While the weight of the evidence remains bullish and SPY/QQQ remain in uptrends, this character change could foreshadow a corrective period for the broader market and a rotation into other groups. $SPY $QQQ $UST10Y $UST2Y $USL $RSP