The Great Rotation Continues
The rotation in the US stock market is gaining momentum today, creating a tale of two markets. On one side, the Dow Jones Industrial Average is trading higher, finding support from major industrial and cyclical stocks that are attracting fresh capital. On the other side, the big technology heavyweights that have driven much of the year’s gains are under pressure, dragging the Nasdaq lower. This divergence highlights a classic “sector rotation,” where investors secure profits from high-flying tech names and redistribute funds into value-oriented industrial sectors.
Broadcom: The Bellwether for Tech Weakness
The catalyst for today’s bearish tech sentiment is Broadcom (AVGO). The semiconductor giant released earnings that, on paper, looked robust:
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Earnings Per Share (EPS): Reported $1.95 versus the expected $1.86.
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Revenue: Came in at $18.02 billion, beating the estimate of $17.47 billion.
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Guidance: Forward guidance also came in better than Wall Street expectations.
So, why the sell-off?
Despite the beat, management indicated that margins would be tighter than expected. In a market environment where a stock has rallied nearly 58% year-to-date, investors demand absolute perfection. The slight concern over margins was enough to trigger a “sell the news” event. As a result, Broadcom stock is currently down close to 10% on the day, acting as a bellwether for the broader weakness in the technology sector.
Technical Analysis: Dow, Nasdaq, and Broadcom
In the video above, I (Greg Michalowski, author of Attacking Currency Trends) break down the technical factors driving this rotation.
I take a close look at the charts for the Dow Industrial Average, the Nasdaq Index, and Broadcom to identify the technical reality behind the price action. In the analysis, I outline:
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The Buyers: Where support is holding for the industrials.
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The Risks: Key danger zones for tech stocks right now.
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The Targets: The next price levels that matter most for traders.
While this is just a sliver of the total market, these three charts perfectly represent the current bias: a continued rotation out of technology and into cyclicals.
In other stock news,
- Dell is said it is raising prices on December 17 across commercial product lines. The price hikes are linked to demand for memory chips. Shares of Dell are down $3.18 or -2.35% at $135.38
This article was written by Greg Michalowski at investinglive.com.