EB Daily Market Report - Tuesday, July 27, 2026

Tom Bowley - July 28, 2026

Executive Summary

Futures were mostly higher overnight, though the NASDAQ remains under pressure
Our major indices gapped up with the Dow Jones showing relative strength
Several Dow components are strong today, led by Sherwin Williams (SHW, +8.56%)
The strength in the Dow is somewhat masked as its two most influential stocks, Goldman Sachs (GS, -0.87%) and Caterpillar (CAT, -4.60%) are both lower
Crude oil ($WTIC, -3.86%) has fallen back below $80 per barrel, weighing on energy shares (XLE, -1.11%)
Meanwhile, health care (XLV, +2.32%) and consumer staples (XLP, +2.21%), two defensive sectors, lead today's action
Technology (XLK, -1.90%) is easily today's worst-performing group, as AI-related stocks are tumbling
Sandisk (SNDK, -15.26%) extends the brutal selloff in semiconductors ($DJUSSC, -2.81%)
KLA Corp (KLAC, -6.03%), a semiconductor equipment manufacturer, reports its quarterly results after the bell today and will be widely followed

Market Outlook

While money rotates big time away from AI and many growth areas, it's not really leaving the market, which is good news for those investing in the benchmark S&P 500. Financials (XLF) have remained very strong and are in the midst of a excellent uptrend:

At some point, I believe money will rotate back into technology, though the timing of a reversal is very difficult to predict when the group is being sold off in panic mode. Financials, due to the negative divergence present, will likely be a short-term casualty of any such reversal, however, as prices could gravitate back towards the rising 50-day SMA for a PPO centerline "reset".

Sectors/Industries

Retail (XRT) is beginning to look much better as the group attempts a breakout today after sideways consolidating for the past year:

There is a slight negative divergence as the XRT breaks out, but that's not unusual. I wouldn't react too quickly to this divergence and grow bearish as the PPO can move up very quickly after a breakout that follows a long-term basing pattern and eliminate the negative divergence. That's what I expect to occur here. This breakout suggests that it could be time to begin looking for leaders in retail sooner rather than later.

ChartLists and Trading Strategies

Health care stocks (XLV) have been on the move. Last night, during our Q2 earnings webinar, I pointed out the top 12 performing industry groups over the past 3 months. Health care was home to 3 of them - pharmas ($DJUSPR), biotechs ($DJUSBT), and health care providers ($DJUSHP). That latter group is very strong today, attempting another breakout. So long as this group remains solid, finding and trading individual stocks within this space makes a lot of sense. One health care provider that I mentioned last night was Tenet Healthcare Corp (THC), which was threatening all-time high territory. Well today, THC made that definitive breakout:

The breakout level and the rising 20-day EMA are two solid entry points during any future pullback in THC.

Upcoming Earnings

Upcoming Earnings and Upcoming Earnings Relative Strength ChartLists are now available on our website and we'll continue to track upcoming earnings reports and provide them to you via ChartLists throughout Q2 earnings season.

Economic Reports

May Case-Shiller home price index: +1.6% (actual) vs. +1.3% (estimate)

July consumer confidence: 90.8 (actual) vs. 92.0 (estimate)

Happy trading!

Tom