On 10/06/26 the technology stock ETF – (XLK) made a new all-time high. Subsequently it has been bearish relative to the S&P 500 (SPX) and the Nasdaq Composite (IXIC). This could be a bearish omen for the broader U.S. stock market.
First, we need to examine the long-term performance of the technology sector. The weekly XLK chart courtesy of Trading View illustrates its action since 2025.
From 2025 to 2026 XLK was the leading sector of the U.S. stock bull market. From April 2025 to June 2026 XLK had a massive 131% gain. In the short span from March 2026 to June 2026 the gain was 57%!
From June 2026 to July XLK was bearish relative to the SPX. At the time this appeared to be a very bearish signal. The upside leader became a potential downside leader.
In August XLK returned to bullish mode. The 09/20/26 blog “U.S. Technology Stocks Surging to New Highs?” illustrated that XLK had formed an Elliott wave – Horizontal Triangle and forecasted a new all-time high.
XLK did make a new all-time high along with SPX and IXIC. The 15 – minute XLK, SPX, and IXIC chart shows what happened after their 10/06/26 peaks.
On 10/09/26 – SPX had retraced 78% of its post 10/06/26 decline. IXIC had retraced about 50%. At the open of the XLK 10/09/26 session it had retraced about 43% of its post 10/06/26 drop. Later in the session it failed to reach the opening high of the day!
The XLK relative weakness could be a hint of more downside action.
The SPX -15 – minute chart examines a potential Elliott wave pattern.
The prior blog noted SPX had recently formed a bearish wedge. This wedge could be a developing Elliott wave – Ending Diagonal Triangle. These are termination patterns that appear after a market as R.N. Elliott stated, “Moved too far, too fast”.
If this pattern is developing SPX could rally on 10/12/26 to near or above the rising upper trendline. A move into this target zone could be a significant peak.
Sometimes New/Full Moons signal market turns plus or minus two trading days. Within the last few months there have been several SPX – lunar turns. There’s a New Moon on Saturday -10/10/26.
The potential lunar time zone is 10/12/26 to 10/13/26.
