Tech’s Outperformance Was Yesterday’s News

Hey trader,

By the time a trade makes the financial headlines, most traders assume the move is over.

This week, tech and semiconductors are everywhere. That timing is worth understanding before you make any decisions.

I flagged tech’s leadership in the Sector Bullseye Leaderboard weeks ago.

The Nasdaq and S&P 500 are now at fresh all-time highs. The media has caught up.

Historically, that is not the signal to exit.

When institutional positioning and price action lead the narrative, the move tends to have further to run once the crowd arrives.

The real question is what the data says about the remaining runway.

Here is what the Sector Bullseye Leaderboard is showing right now, why semiconductors matter more than the headlines suggest, and how I’m positioned heading into mega-cap earnings week.

The Decisive Bullish Blow

The Sector Bullseye Leaderboard tells the story clearly.

Tech (XLK) holds three of the four tracked intervals, with energy (XLE) still defending the year-to-date column.

The leaderboard is unchanged from last week. That sounds routine until you look at what it took to keep it that way.

Tech needed an explosive bullish move on Friday just to hold its one-week lead over energy. The final score is what matters, and tech delivered.

There is nothing bearish about this scoreboard. Three out of four intervals belong to tech.

The one sticking point is the year-to-date column. Energy still leads tech by roughly 13 percentage points, and that gap will not close in a single week.

Energy had its run. Tech is building one now, and the leaderboard is reflecting that shift in real time.

What the Data Is Telling Us

There is a rule I come back to often. Technology tends to lead out of meaningful market bottoms.

We are now four weeks into the rally off the lows, and that rule is being reinforced again. When institutions rotate into semiconductors and software, they vote with capital, not opinions.

Semiconductors deserve special attention here. They have historically acted as a leading indicator for the broader tech sector. When chips lead, the rest of tech tends to follow, and that sequence is playing out exactly as historical cycles suggest.

Last week offered a warning, though. Energy did not fade quietly. The trade has real institutional support behind it, and complacency four weeks into a rally is a mistake.

Staying bullish does not mean becoming careless. This is when discipline matters most.

Earnings Will Be the Catalyst

The market is sending a clear signal right now. Institutional capital is more focused on earnings growth than on geopolitical noise, and that tells you where real conviction sits heading into this week.

Mega-cap tech reports are on deck. These numbers will either confirm the thesis or force traders to take a harder look at the tape.

My base case is confirmation. The fundamental backdrop for large-cap tech remains strong, and the price action supports that view.

Defensive sectors are still lagging, which is exactly what a healthy bull market looks like. When money rotates out of utilities and staples and into growth, the tape is telling you something worth listening to.

The perma-bears calling a top since the start of this rally have been wrong at every step. A well-constructed short thesis deserves respect. A thesis built on ignoring what the data shows does not.

As long as growth leads and defensives lag, this bull market is structurally intact. The tape is confirming it week after week.

I am holding my tech positions and not fighting a trend the data keeps validating. Until the Sector Bullseye Leaderboard starts telling a different story, the path of least resistance for tech remains higher. Position accordingly, and let the market do the work.

The Trinity Terminal has the setups I’m monitoring this week. Log in and track the sector rotation in real time as earnings roll in.

Fight the trend at your own peril. I know I won’t be.

Talk soon,
Gianni Di Poce