Is The Current U.S. Stock Market Rally On Thin Ice? (Magnificent 7 Exhaustion?)

This video comes in response to a question from one of our Gold members:

Q: "While major tech stocks like MSFT, Nvidia, Tesla, and Apple are up (monstrously) since October, if we took those out of the mix, the market has been basically flat. Can you give your thoughts on this please?"

In this video, Jerry Robinson of Followthemoney.com answers this question by showing how sector rotation evolves across the business cycle.

And this member question is interesting as the so-called Magnificient Seven stocks (Nvidia, Facebook, Tesla, Amazon, Google, Microsoft, and Apple) would seem to be nearing exhaustion after an incredible rally in the first half of 2023.

However, as Jerry explains in this video, it is important to note that the Technology sector and Consumer Discretionary sector tend to lead the stock market after major bottoms. This appears to be what is happening now.

While tech and discretionary stocks typically lead the market higher, a rally in the Energy sector, which tends to show leadership later in the cycle, often portends weakness ahead.

Here's a helpful article from Stockcharts that explain sector analysis: https://school.stockcharts.com/doku.php?id=market_analysis:sector_rotation_analysis

Charts courtesy of Stockcharts.com.

This video is an excerpt from Jerry Robinson's live weekly "Trends & Profits" webcast. Learn more here: https://followthemoney.com/webcast/

Видео Is The Current U.S. Stock Market Rally On Thin Ice? (Magnificent 7 Exhaustion?) канала Follow the Money