The Dow–tech divergence also signals that risk is being repriced. Mega-cap AI stocks remain expensive, and recent selling from SoftBank and big short positions against NVDA and PLTR suggest more volatility ahead. In contrast, blue chips and cyclicals look more stable in the near term as funds rotate.
For the next month, I lean toward blue chips and cyclicals outperforming since they benefit most from liquidity returning without facing valuation stress. I’ll watch AI leaders for opportunities, but I prefer to wait for cleaner setups rather than buying immediately into this bounce.
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