I’ve been talking and writing about market rotation in the past weeks; just glancing at the S&P 500 (SPX), it looks weak. Yesterday was a hugely positive session, considering Communication Services (XLC) and Technology (XLK) finished in the red. It also means eclectic market rotation.

Mega-Cap Hits Pothole

The hottest names of the past three years are under pressure after they couldn’t avoid the gravitational pull of Oracle Corp (ORCL).

But look at all these smaller green boxes in the Financials (XLF), Health Care (XLV), and Industrials (XLI).

There was something for almost everyone.

Breadth

All the action shifted to the New York Stock Exchange (NYSE) and blue-chip names.

Market Breadth	NYSE	NASDAQ
Advancers	1,852	2,628
Decliners	926	2,060
New Highs	235	336
New Lows	14	103
Up Volume	2.69 billion	3.81 billion
Down Volume	1.22 billion	3.54 billion

Participation Theories

Solid number of advancers on the S&P 500 (SPX), S&P 400 (MID), and S&P 600 (SML).

Growth was the only blotch on the factors board, but let's not write this juggernaut off yet.

Almost Greedy

Going into the weekend will spark major enthusiasm, meaning the Fear & Greed Index will have a lot of catching up to do.

Today’s Session

So much time and energy have been spent on the “AI bubble” and palace intrigue at the Fed, that many awe-inspiring and hopeful developments have not been reported, or have been underreported. 

Cyclical stocks are crushing defensive stocks, which is usually a harbinger of better times ahead for the broader market and economy. 

Yesterday, we learned the September trade deficit came in at the lowest level since June 2020.

• $52.8 billion against the consensus of $63.1 billion, and the prior month of $ 59.3 billion.

Meanwhile, the equal-weight S&P 500 (RSP) is on fire, posting an emphatic breakout.

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