A Couple Charts Before Football

Look Beyond Tech

Author

Larry Thompson
August 30, 2025

Look Beyond Tech

We all own enough Tech.

It’s the one area it’s almost impossible not to be overweight.

I hit on this in last week’s show, but it’s worth repeating….

What most investors aren’t ready for is a rotation away from Tech.

When you buy the S&P 500 you’re not really buying “500 of the largest companies in America.”

You’re buying a Tech-heavy momentum fund.

That’s fine. Momentum is one of the most consistent factors in market history.

But when leadership rotates few are prepared.

And with September coming up, the month with the worst average returns for the S&P 500.

That rotation risk matters even more.

The top 100 stocks make up 70% of the index.

So in theory, you could have the majority of stocks doing just fine, while the S&P chops sideways if those top names stall.

I’m not bearish.

That kind of chop can actually be healthy and set up a strong finish into year end.

The point is simple.

Know the structure so you’re positioned correctly.

At the very least, so you don’t panic.

So let’s dig into a few places outside of Tech worth paying attention to:

$XLF – Financials (~14% of the S&P 500)

Financials look strong. 💪

I break them down in detail in this week’s Thompson Two Cents Live.

Leadership is improving, spreads are working as a tailwind, and even AI is creating new applications in the space.

Financials continue to look great.

The charts within are impressive!

$XLB – Materials (~2% of the S&P 500)

Owning the index gives you almost zero exposure here.

Materials are carving out a promising reversal with a clean risk/reward setup.

Worth a spot on the radar.

Materials reversal looks compelling…but you have NO exposure.

The charts in Materials look great….but you barely own them…..🤨

$XLE – Energy (~3% of the S&P 500)

Same story. Tiny exposure in the index, but the group is shaping up for a breakout.

Energy Breaking Out - Relative Strend Shaping Up

Little Breadth Thrust In Energy 👀

Still A Bull Market

It’s still a Bull Market.

This is just a tactical (shorter term) view of what we COULD see heading into September.

A Tech pause, some chop, and rotation under the surface.

That can be healthy.

The key is being prepared to react, not panicking after the fact.

My Weekly Show - Thompson’s Two Cents

🎥 Thompson Two Cents Live

This week’s show is all about September prep and the first 10 minutes are really worth a watch. I lay out the full framework I’m using right now.

🚀 Throw it on 1.5x speed and let it rip.

👍 Give it a like. It’s the easiest way to show me some love.  

The Sunday Stalk List | Ep. 14

If you want clean charts, clear setups, and tactical insights — this one’s for you.

It hits inboxes every Sunday so you know exactly what to keep an eye on for the week ahead.

The early feedback has been 🔥 and we’ve already tagged some big winners.

Cheers,

Larry Thompson, CMT CPA