Maria’s Note: Maria Bonaventura here, Nomi’s senior managing editor. For this week’s guest edition of Inside Wall Street, we’re handing the reins to our friend, master trader Jeff Clark.

For longtime readers, Jeff needs no introduction.

He’s the man who, during the 2008 market crash, gave his readers the chance to double their money at least 10 times… with gains as high as 490%.

He did it again during the 2020 Covid crash. While most people lost money… anyone who followed Jeff’s advice had the chance to double their money at least 17 times that year.

And last year was the same story. Jeff’s readers had the chance to profit at least 50 times – with gains as high as 167%… 173%… and even 333%.

Today, Jeff is urging caution for those chasing this year’s tech rally. As he puts it, “the train has already left the station” for traders.

He’s eyeing a different sector instead…

Are the retail stocks ready to rally?

Stop laughing. It’s a serious question.

Of course, the retail sector has lagged the market this year. So, investors are right to question the legitimacy of my question.

But, as I’ve argued for several months, we are in a rotational market – where money moves back and forth between sectors. And, it looks to me like the lagging retail sector is getting ready to play “catch-up.”

Let me explain…

Technology has been one of the hottest sectors in the market this year. The Technology Select Sector Fund (XLK) is up nearly 40% in 2023 – far outperforming the 15% gain in the S&P 500.

But, as we pointed out to Market Minute readers in early June, that outperformance had reached extreme levels. Investors chasing it were likely to get hurt. On June 1, we wrote:

All the talking heads on the financial networks are talking about how stocks like Microsoft, Apple, and NVIDIA have been screaming higher – and leaving the rest of the market behind.

They’re talking about how just a few of the technology names are responsible for all of the gains in the S&P 500 this year. And that you need to own these names or else risk being left behind.

What they don’t tell you is the train has already left the station.

It’s too late to chase these stocks now.

Here’s an updated look at the ratio chart I showed Market Minute readers back then…


This chart tells us how the technology sector is performing relative to the S&P 500.

When the chart is moving lower, the technology sector is underperforming the S&P 500. When the chart is moving higher, tech stocks are outperforming.

You can see how strong the tech sector was for the first six months of 2023. But, that trend changed recently. The chart has turned lower. That tells us the technology sector is underperforming the market.

In other words, money is coming out of the technology stocks. It’s rotating into other areas.


Well, take a look at this ratio chart comparing the retail sector to the S&P 500…


This is nearly the opposite view of the tech sector. The Retail Sector Select Fund (XRT) significantly underperformed the S&P for the first six months of 2023.

Recently, though, it turned higher. For the past two months, retail stocks have been outperforming the market.

It looks to me like money is rotating out of technology and finding a new home in the retail sector.

If this trend continues, the beaten-down retail stocks – many of which are trading with single-digit price/earnings ratios – could be sharply higher by the end of this year.

Best regards and good trading,


Jeff Clark
Editor, Market Minute

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