Episode summary
Big Uptrend. Tech Momentum Fading | Katie Stockton on the Rotation Investors Are Missing
Excess Returns
· · 54 min · Guests: Katie Stockton
Summary
Katie Stockton says the S&P 500 and Nasdaq 100 remain in long-term uptrends, but both have lost short-term momentum, which keeps her neutral in the near term. She points to the 20-day moving average rolling over, a June consolidation pattern, and a softer tone in the QQQs as reasons to stay alert without calling for a major breakdown. She also notes that the March monthly MACD sell signal on the S&P 500 was unusual because April reversed it so quickly, creating a rare whipsaw rather than a confirmed trend change.
Her broader message is that the market is not being carried by mega-cap tech alone. Leadership from semiconductors and the Magnificent Seven has slipped, but breadth remains decent enough that most sectors are still participating. That has opened room for rotation into healthcare, industrials, utilities, insurers, and biotech, where she says breakouts are appearing. She emphasizes that breadth and leadership are different, and that investors should not confuse broad participation with the same kind of outperformance that tech delivered earlier.
Stockton also argues for systematic risk management through stop losses, trend following, and, when needed, partial hedges such as PSQ. She sees international stocks as still constructive versus the U.S. over the long term, while gold has moved into a corrective phase after losing some long-term upside momentum. Overall, her read is one of a mature uptrend with pockets of opportunity outside the AI trade, not a clear bear market signal.
Key takeaways
- Katie Stockton says the S&P 500 and Nasdaq 100 are still in long-term uptrends, but both show short-term momentum loss and a neutral bias.
- She says the March monthly MACD sell signal on the S&P 500 was whipsawed in April, so she wants more confirmation before treating it as durable.
- Stockton sees deteriorating relative strength in the mega-cap tech and semiconductor complex, but she does not yet see an intermediate-term reversal.
- She says healthcare, industrials, utilities, insurers, and biotech are showing more constructive breakouts as sector rotation broadens.
- Stockton says stop losses, trend following, and partial hedges like PSQ are the most practical tools for managing downside risk.
- She says emerging markets still look favorable versus the U.S. longer term, while gold has shifted into a corrective phase after losing long-term upside momentum.
Notable quotes
“We're we're maintaining right now neutral bias, and the rationale behind that is simply the loss of momentum”
“overbought is a function of positive momentum. And when it makes a difference, when it has sort of the implications that the word suggests, um it's when you see the downtick in momentum”
“We don't have confirmed sell signals right now on the monthly charts of either benchmark NASDAQ 100 or S&P 500”
How the episode opens
You're watching Excess Returns, the channel that makes complex investing ideas simple enough to actually use where better questions lead to better decisions. I'm Matt Ziggler. Justin Carminau's actually in charge here today. Don't let him tell you otherwise. We have one of our favorite technical analysts back with us. Fair lead strategy zone Katie Stockton. What's good, Katie?
A lot. I think so far so good for the summer. Thank you. — I like the sound of that, especially post Fourth of July. So, straight into the deep end. Last quarter, we talked about a continued long-term uptrend for the S&P. Wouldn't we all like that? Nice, easy, quiet summer hanging out by the pool.
Rarely ever. I know it's that that used to be sort of a guarantee, didn't it? But not not so much anymore. — Don't people take vacations? What did CO ruin this? So, you're seeing some shorter term potential warning signs. Let's start here. Let's get this chart up. What's going on?
Yeah, the shorter term, I mean, there's been a loss of momentum. We're we're maintaining right now neutral bias, and the rationale behind that is simply the loss of momentum. You can see it in the moving averages like the 20-day moving average.
For one, that's a very close sort of tight moving average. And normally, we might just ignore it. But when you have such a steep trend and then it loses enough steam to have that 20-day roll over, we do pay attention and it has been an environment where it has been just this really steep up move from the leadership as you know.
So that puts us on guard for any loss of momentum. The consolidation phase that initiated in June is, you know, neutral.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- tech momentum fading
- market breadth vs leadership
- sector rotation
- risk management with stops and hedges
- gold trading outlook
Companies and tickers mentioned
- QQQ
- Fairlead Strategies
- Fairlead Funds
- Invesco QQQ
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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