Technology has entered RISK ON. As the largest sector by market cap, this transition carries significant weight for the broader market. The composite holds at +51 RISK ON as SPY pushes to $694.46, now up over $60 from the March 30 correction low — a gain of more than 9.5%. The RSI has crossed into overbought territory at 72, the first time it has exceeded 70 during this recovery. The VIX remains fully normalized at 18.0. The 50-day breadth has expanded to 56% and the 200-day breadth to 56%, both at their highest levels since the correction. The sector landscape has shifted notably: Technology has entered RISK ON while Energy has rotated from RISK ON to CHOP, keeping the RISK ON count steady at 6.

Sector Leadership

6 sectors RISK ON, 5 CHOP, 0 RISK OFF — Technology enters RISK ON, Energy rotates to CHOP:

💡 What We’re Watching

• Technology enters RISK ON — As the largest sector by market cap, Technology’s transition to RISK ON at +39 adds significant weight to the recovery. The medium-term has flipped positive to +15, the short-term is at +75, and the long-term is at +45. This is the sector that was in RISK OFF at -36 just three weeks ago.
• RSI crosses 70 into overbought territory — At 72, the RSI has exceeded 70 for the first time during this recovery. Overbought readings do not necessarily signal an imminent pullback — strong markets can remain overbought for extended periods — but they do indicate the pace of the advance has been rapid. SPY has gained over 9.5% in just over two weeks.
• Energy rotates from RISK ON to CHOP — Energy’s short-term has dropped to -100, reflecting sharp selling pressure. However, the medium-term at +45 and long-term at +80 remain strong, suggesting this may be short-term profit-taking rather than a fundamental shift. The RISK ON count stays at 6 as Technology replaces Energy.
• Sector rotation underway — growth replacing value — The leadership is shifting. Technology and Communication Services entering RISK ON while Energy rotates out represents a move from the value and commodity leadership that characterized the early recovery toward growth and innovation sectors. This is a pattern that often emerges in the later stages of a recovery.

The Bottom Line

The recovery continues to broaden. Technology entering RISK ON is a significant development — when the largest sector by market cap participates, it tends to extend the rally’s duration and depth. Six sectors remain in RISK ON, zero in RISK OFF, and the rotation from Energy to Technology suggests the market is transitioning from a recovery phase to a new advance.

In our view, the RSI at 72 warrants attention. The market has covered a significant amount of ground in a short period, and a period of consolidation or a modest pullback would be normal at this stage. The underlying breadth with 77% above the 20-day and 56% above both the 50-day and 200-day moving averages remains supportive.

The medium-term at +8 CHOP continues to lag the short-term and long-term, which are both firmly in RISK ON. The 50-day breadth at 56% is improving but has not yet pushed the medium-term across the RISK ON threshold. Financials at -10 and Consumer Discretionary at -10 have both improved and exited RISK OFF, but neither has yet reached positive territory.