Core Viewpoint - The technology sector is currently a focal point in the market, showing strong short-term rebounds but indicating weakening long-term momentum, suggesting a cyclical adjustment may be underway [1][3]. Group 1: Market Dynamics - The technology sector, comprising 30% of the S&P 500 Index, typically leads market movements, both in bullish and bearish phases [1]. - The recent strong rebound in the XLK ETF since April has led to a successful breakout above its 200-day moving average, signaling short-term positivity [3][5]. - However, the monthly MACD has shown a bearish crossover, marking the first "sell" signal since early 2022, indicating a potential price adjustment lasting at least six months [3]. Group 2: Technical Analysis - The Technology Select Sector SPDR is currently in a long-term uptrend but is facing upward pressure due to diminishing momentum, suggesting that the recent rebound may stall [5]. - A supply zone exists between $228 and $241, where the XLK ETF previously experienced narrow fluctuations, indicating a potential halt in the current rebound [5]. - The relative strength of XLK compared to the S&P 500 has recently increased, indicating superior performance during the market rebound, but this may be a temporary trend [7]. Group 3: Future Outlook - Despite entering a technical bear market phase, a long-term bullish outlook is anticipated to re-emerge around 2026 [3]. - The current relative strength of technology stocks is likely to be more of a counter-trend nature, suggesting limited sustainability moving forward [7].