U.S. equities are running into a major confluence of resistance after a weak rebound in recent days.
Until buyers step up and show some serious follow-through, sellers are likely to remain in control.
When looking at the most crucial risk-on groups, two sectors are approaching a resolution that could set the tone for the weeks and months ahead.
First, Large-Cap Technology relative to the S&P 500 is teetering just above the lower bounds of a two-year topping formation.
With Tech representing roughly 30% of the S&P, a breakdown here wouldn't just be a sector-specific issue—it could have broader implications for the entire market.
Adding to the concern, Home Construction $ITB, a critical economically sensitive group, is also carving out a massive distribution pattern.
The bulls have struggled to catch a bid so far, giving the bears another opportunity to push prices lower.
Any breakdown in these charts would severely dampen risk appetite and significantly increase the likelihood that this bull cycle is in real trouble.
