SPDR ETF Flat as Semiconductors Tumble 10% and Breadth Hits Highs
SPY•SPDR S&P 500 ETF Trust held near flat while VanEck Semiconductor ETF plunged 10% in early July, buoyed by expanding advance-decline breadth hitting all-time highs. Technical analysis highlights resistance between SPX 7,500 and 7,620 with support at 7,400–7,270, signaling bullish seasonality despite slowing momentum.
1. Seasonal Bullishness and Breadth
July has historically been one of the strongest months for the SPDR S&P 500 ETF, with positive returns in 80% of the past 20 years (average gain 2.67%) and 100% of the past decade (average gain 3.51%). This seasonal trend aligns with a breakout in advance-decline breadth, which reached fresh all-time highs at the start of July.
2. Sector Rotation and Semiconductor Impact
The VanEck Semiconductor ETF dropped 10% in the first two trading sessions as investors reacted to excess AI capacity sales by Meta and bearish commentary on chip overcapacity. Despite this leadership weakness, the broad ETF remained essentially flat, reflecting a rotation into more diversified S&P 500 components.
3. Key Technical Resistance and Support
Technical resistance for the broader index is concentrated between the 7,500 round number and last month’s high near 7,620 (10% above last year’s close). On the downside, the rising 50-day moving average around 7,400 and the June low at 7,270 provide initial support levels.
4. Bullish Technical and Sentiment Indicators
Option flow data show a higher ratio of put buying to call buying over the past two weeks, indicating increased buying power. Combined with strong breadth and historical seasonality, these factors suggest the ETF may overcome its recent momentum slowdown and push through resistance levels.
