How to Find the Next Big Trend (Sector Rotation 101) 📊🔍 #Barchart

Added: 2026-05-21

[00:00:00]energy just broke through. And right as that happened, the market started to decline. But as the market recovered, energy started to pull back. But one thing we've noticed recently here is is that as the market recovered and energy pulled back, we can see that as the market gets higher and higher, energy still wants to have its moment. And we can see that we're really at this inflection point. If energy can continue to break out of this resistance that we have here, because we've already got a higher low, right? So, energy is already saying that if we break this, then we're now creating a higher high, starting a new trend and potentially a pullback from stocks. Now, if you want to track this trend using moving averages as well, you also have the percentage of large-cap stocks above their moving average. Now, you can see that trend here clearly, seeing that energy is above all moving averages, and 86% of them are above their short-term, and 90% of them are above their long-term moving averages. And inversely, you can see that the weakness is starting to show in information tech, because it's been strong, right? Hitting record highs, and you can see that strength here. And so, what you want to look for in this chart is it's starting to fade, right? If we start to see more stocks starting to fall below their 50-day moving average, and then you start to see weakness in the 20-day average, then that tells us that there's weakness starting to happen. But if you're trying to figure out where exactly is the next trend, or where can I find that opportunity, or how can I dive deeper into this, I really like to look at the stock market sectors, because this is going to tell me like how things perform as a sector over time. So, whether we're looking at what's popping today or let's say year-to-date, right? Energy and tech are obviously going to be at the top of this. We just saw that strength in the moving averages. But, what's been weak?

[00:02:08]Where can we possibly find opportunities? And so, you can kind of see that the weakness in this year has been in financials, healthcare, consumer discretionaries, right? So, maybe you can look for opportunities in consumer discretionary, healthcare, if you're somebody that's looking for lower prices cuz this is obviously telling us that there's some weakness here. Especially in healthcare.