SPDR S&P 500 ETF Tests 720 Support After Magnificent 7 Drop 12.7%
SPY•SPDR S&P 500 ETF Trust is testing its early-June support near the 720 level for a potential double bottom, trading below its 50-day moving average for the first time since April. Comparable breadth hit record highs while Magnificent 7 stocks fell 12.7% in June as semiconductors and retail led gains.
1. Market Positioning and Support Levels
SPDR S&P 500 ETF Trust held its early-June low near the 720 strike after dipping below its 50-day moving average for the first time since April. Chartists note this is a second test of that level, raising the possibility of a double-bottom formation if bulls defend it.
2. Sector Rotation and Breadth
Underperformance of the Magnificent 7 stocks drove a 12.7% slide in hyperscalers for June, while industrials, financials, retail, semiconductors and biotech posted month-to-date gains ranging from 3.2% to 16.4%. Meanwhile, the S&P 500 advance-decline line surged to new highs, signaling broadening market participation despite modest index declines.
3. Semiconductor ETF Warning
The VanEck Semiconductor ETF displayed bearish momentum divergence and closed below prior week support twice in four weeks, suggesting a potential pullback in semiconductors. A correction in SMH could presage a broader SPDR S&P 500 pullback if sector leadership shifts further.
