July Range Reset May Set the Stage for a Major Sector Rotation
Michele Schneider | Jul 15, 2025 03:18AM ET
Our inside sectors of the US economy, small caps, retail, and transportation, all stopped at the January 6-month calendar range high and never cleared.
Semiconductors did.
Now, though, given earnings, tariffs, CPI, retail sales, nagging yields, and seasonal weakness, the new range will be quite telling.
The weekly charts of the economic modern family help us see what the next big move will be.
As of Monday, July 14th, the entire family made their July high last week.
They made their July low in the first week of July.
This is huge!
We start out this week, trading inside the trading range from last week.
That makes a lot of sense considering how much is on the line right now.
We now have the greatest opportunity to follow the range break up or down, as both scenarios could present.
For example, the weekly chart of IBB Biotech, should the price clear last week’s high, that also
- Clears the calendar range high for July
- Clears the 50 and 200-week moving averages
- Makes this sector, which has been so beaten up, very attractive.
Semiconductor SMH, with earnings on tap in Taiwan Semiconductor Manufacturing (NYSE:TSM)and ASML Holding (NASDAQ:ASML), looks like it has the highest probability of clearing the July calendar range and continuing its upward trajectory.
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I remain focused on Granny Retail XRT.
XRT Daily chart shows the January 6-month calendar ranges with green horizontal and red horizontal lines.
Maybe I am just a technical geek, but this chart is so perfect, it will require only execution and no second-guessing if it aligns with one of these scenarios
- XRT takes out both the January and the July 6-month trading range highs and follows through (July high depicted in black)
- XRT takes out the January calendar range low (red line) and July range low (black line) PLUS both the 50 and 200-DMAs, which formed a golden cross.
- XRT takes out the July highs and then fails it (low risk short)
- XRT takes out the July calendar range lows and returns above it (low-risk buy opp)
- XRT stays within the range for July thus far, going nowhere for the time being. (Find another sector with a more interesting setup.)
ETF Summary
(Pivotal means short-term bullish above that level and bearish below)
S&P 500 (SPY) 621 support
Russell 2000 (IWM) 220 support
Dow (DIA) 442 support
Nasdaq (QQQ) 552 support
Regional banks (KRE) 62 support
Semiconductors (SMH) 282 support
Transportation (IYT) 70 pivotal
Biotechnology (IBB) 130 now must hold
Retail (XRT) 79-80 must hold for the best bullish case
Bitcoin (BTCUSD) 118 support 125k next
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