SPY has crossed $700 for the first time since the correction began, closing at $700.65 — a gain of over 10% from the March 30 correction low of $634. The composite holds at +53 RISK ON with the VIX at 18.8 and the RSI at 84. The short-term remains at +80 RISK ON with 80% of stocks above their 20-day moving averages. The medium-term is at +8 CHOP with 57% above the 50-day MA. The long-term holds at +67 RISK ON with 55% above the 200-day MA. The sector count has expanded to 7 RISK ON — the highest of the recovery — with Communication Services strengthening and leadership rotating from defensive sectors toward growth and cyclical names.

Sector Leadership

7 sectors RISK ON, 4 CHOP, 0 RISK OFF — broadest participation of the recovery:

💡 What We’re Watching

• SPY crosses $700 for the first time since the correction began — The S&P 500 has reached $700.65, a gain of over 10% from the March 30 correction low of $634. This is the first time SPY has traded above $700 since the sell-off began and represents a full recovery of the correction losses.
• Communication Services surges to the top sector — Comm Services has jumped from +35 to +53, overtaking Materials and Utilities for the top spot. With ST at +75 and LT at +80, this sector now has one of the more balanced risk profiles across all three timeframes. As a sector that includes major names like Meta and Alphabet, its continued strengthening adds significant market cap weight.
• Technology continues to strengthen within RISK ON — Tech’s ST score has surged to +95 with a 5-day return of +6.2%. The sector is within 0.1% of its 52-week high and is outperforming SPY by +3.1% over the past 20 days. The MT has improved to +30, pushing the composite to +49.
• Leadership rotating from defensive to growth — The top three sectors are now Comm Services, Materials, and Technology — a shift from the Utilities-led recovery of recent weeks. This type of rotation from defensive leadership to growth/cyclical leadership has historically been associated with a maturing recovery.
• RSI reaches 84 — deeply overbought — The RSI has moved from 72 yesterday to 84 today. Historically, an RSI above 80 on SPY has preceded short-term consolidation, though it can also occur at the start of a sustained uptrend. This reading is worth monitoring alongside the medium-term score.

The Bottom Line

SPY crossing $700 represents a full recovery from the correction. The composite holds at +53 with 7 of 11 sectors in RISK ON and zero in RISK OFF — the broadest sector participation of the recovery. Liquidity conditions remain supportive with HY spreads at 2.85% and tightening, a normal yield curve, and an expanding Fed balance sheet.

In our view, the rotation from defensive leadership (Utilities, Energy) toward growth and cyclical names (Comm Services, Technology) is a development worth noting. This type of leadership shift has historically been associated with transitions from recovery to expansion. Technology at +49 and strengthening adds the largest sector by market cap to the recovery leadership.

The RSI at 84 is the most elevated reading of the recovery and suggests that some consolidation would not be unusual from a technical perspective. The medium-term score at +8 has not yet returned to RISK ON — a sustained move above +30 would signal a more durable shift in the intermediate-term trend.