Last week felt oddly familiar as the market delivered another short‑lived scare. Thursday’s dip left many wondering if a larger correction was on the horizon, but by Friday the major indices settled back above key support levels.
What the Numbers Said
The S&P 500 briefly slipped beneath its 100‑day simple moving average, yet closed back on top, signaling that buyers still dominate. Meanwhile, the S&P 600 Small‑Cap, S&P 400 Mid‑Cap, and the Dow Jones Industrial Average all stayed above their 21‑day exponential moving averages.
Weakness was most evident in the Nasdaq Composite and Nasdaq‑100, where the famed “Magnificent Seven” tech titans felt pressure as investors reassessed AI‑related spending. The slowdown didn’t cascade into a broad market collapse, but it did hit a handful of sectors—Technology, Consumer Discretionary, Communication Services, and Financials—harder than others. Sectors like Utilities, Real Estate, Materials, Energy, Industrials, and Health Care proved more resilient, and overseas markets kept climbing.
Equal‑Weighted S&P 500 Gaining Ground
When you compare the equal‑weighted S&P 500 to its cap‑weighted counterpart, the gap that persisted for most of the past year is narrowing. Mega‑cap tech stocks had long carried the market, but since November 2025 the broader pool of stocks has started to chip in more actively.
Quickly Spotting Sector Strength
The Sector BPI section on the Market Summary page offers a bird’s‑eye view of which sectors are gathering momentum. A recent snapshot shows Communication Services taking the biggest hit, while other areas are more mixed.
Does this mean investors heavily weighted in Technology and Communication Services should rebalance right now? Not necessarily. It’s a reminder that diversification remains a prudent defensive tool. Even modest exposure to non‑tech sectors can soften the blow when volatility spikes.
Weekend Portfolio Check‑list
- Open a chart for each holding in your portfolio.
- Overlay the 21‑day EMA and 100‑day SMA to gauge short‑term trends.
- Compare each holding’s relative strength against the S&P 500.
Instead of reacting impulsively, use this routine to stay disciplined and informed—traits of confident investors.
Markets will always swing, but with the right charts and a clear plan you can navigate the ups and downs with ease.
Wishing you a pleasant Valentine’s Day and a relaxed long weekend.
Source: Materials provided by https://articles.stockcharts.com.Note: Content may be edited for style and length.