Vol. III · No. 148 · Thursday, July 23, 2026

Momentum, rotation, and the tape that actually moved — read before the bell.

The momentum board nearly quadrupled its green count — from 1 green sector Tuesday to 4 Wednesday. Technology, Energy, Utilities and Materials now read GREEN; only Financials, Consumer Discretionary and Communication Services still read RED.

Alphabet posted its first-ever quarter of negative free cash flow after Wednesday's close, alongside a record cloud-revenue beat ($119.8B vs. $117.1B est.) and a raised capex plan; shares were indicated lower ahead of Thursday's open on the cash-flow headline and a fresh $1B EU antitrust fine (confirmed FMP earnings-company, news reports).

Tesla missed on earnings per share — $0.33 actual vs. $0.50 estimated — even as revenue beat ($28.24B vs. $26.42B est.), with management striking a cautious tone on robotaxi timing on the call.

IBM's EPS landed exactly in line at $2.93, but revenue missed estimates by roughly 1.7%; the stock — still well off its levels from a single-session collapse several weeks ago — is an early test of whether Wednesday's broader improvement survives a mixed report.

Honeywell beat on EPS this morning — $1.95 actual vs. $1.80 estimated — in its first report since completing its three-way corporate separation, while Union Pacific, Intel and Newmont round out a heavy Thursday docket ahead of next week's FOMC meeting.

Dear Reader, Tuesday's letter told you the momentum board had crawled to one green sector out of eleven — Technology, and Technology alone. Wednesday it did something this letter has not had occasion to report in some time: it nearly quadrupled. Four sectors now read GREEN on the CCI(20) verdict — Technology, Energy, Utilities and Materials — while four more sit at YELLOW and only three, Financials, Consumer Discretionary and Communication Services, still read outright RED. That is real breadth widening, not a single-stock illusion dressed up as a trend, and it happened before a single one of Wednesday night's marquee earnings reports even hit the wire.

Those reports arrived a few hours later, and Alphabet's is the one worth sitting with. The headline numbers look, on their face, spectacular — $9.11 in earnings per share against a $2.64 estimate, revenue of $119.8 billion against $117.1 billion expected, both comfortable beats. Read past the headline and the picture complicates: that EPS figure carries the fingerprints of a large one-time item, most likely an unrealized investment gain, and is not a clean read on operating strength. What is clean is this — Alphabet posted its first-ever quarter of negative free cash flow, even as it raised its own capital-spending plan, and absorbed a fresh $1 billion European antitrust fine in the same 24 hours. Shares were indicated lower ahead of Thursday's open. The market, in other words, priced the cash-flow story over the EPS number. It usually does, eventually.

Tesla's report ran the opposite direction — a real, unadorned earnings miss. EPS came in at $0.33 against a $0.50 estimate, even as revenue beat comfortably at $28.24 billion against $26.42 billion expected. Management leaned cautious on robotaxi timing on the call, and the company's own free cash flow swung negative in the same quarter. Beating on revenue while missing badly on earnings and burning cash is not, on its own, a crisis — plenty of growth companies have lived through stretches like it — but it is exactly the kind of quarter that tests whether a stock's remaining believers are trading a story or a set of numbers.

IBM split the difference in the most literal way available: earnings per share landed at exactly $2.93, matching the estimate to the penny, while revenue missed by roughly 1.7%. That is about as close to a non-event as an earnings report can be on paper. What makes it worth a full paragraph here is context — this is IBM's first report since a single-session collapse of roughly 25% rattled the tape several weeks ago, and an in-line-but-not-inspiring quarter landing on top of that kind of scar tissue is precisely the setup this letter watches most closely. Thursday's actual session, not Wednesday's premarket chatter, will be the real test of whether the stock can hold ground on a report that gave bulls and bears equally little to work with.

Underneath all three stories, the same current keeps running: crude climbed again Wednesday, and Energy joined the sector board's green column on the back of it — a Houthi strike on Red Sea shipping lanes pushed Brent above $98 a barrel, extending a run that started well before this week and shows no sign of resolving itself before next week's FOMC meeting, the first under new Fed Chair Kevin Warsh. One markets column flagged the same one-to-four breadth divergence within hours of Tuesday's close, which is a useful outside check that this letter isn't reading tea leaves alone. Four green sectors on a Wednesday, with three of the market's most closely watched earnings reports landing the same evening and Thursday's actual trading session still ahead of you as you read this — that is a real improvement in the tape's internals. It is not, on its own, proof that the improvement survives contact with the open.

Brad Hoppmann

Editor, Sector Cycle Radar — momentum, rotation, and the tape that actually moved.

Union Pacific and Honeywell report before the bell (Honeywell's beat is already in hand: $1.95 vs. $1.80 est.); Intel and Newmont report after the close. Initial and continuing jobless claims land at 8:30am ET. The real tell of the day is whether Wednesday's four-sector green board holds through a session that has to digest Alphabet's cash-flow story, Tesla's earnings miss, and IBM's in-line-but-unconvincing quarter all at once — and whether Energy's new green verdict survives if crude gives back any of Wednesday's Red Sea-driven spike.

"Yesterday one sector said the storm had passed. Today four of them are saying it — and Alphabet just posted the first negative cash-flow quarter in its history on the same news cycle. Read the whole room before you trust any single voice in it."

— The Full Sector-By-Sector Radar Continues Below —

GREEN

XLK closed Wednesday at $180.27 (-0.28%). Current CCI -50.33 vs. prior session -55.17, vs. 10-session trailing average -80.61. Current reading exceeds both prior and average — GREEN verdict holds for a second straight session.

Technology's headline session return was a modest -0.28%, but that number hides a sharp split running straight down the middle of the sector. Chip and hardware names rallied — Broadcom gained 2.67%, Nvidia 2.30%, AMD 1.45%, Texas Instruments 0.99% — while enterprise software names were sold hard: ServiceNow fell 6.47%, the single worst mover across the entire 74-ticker Dominator roster Wednesday, Adobe dropped 3.87%, and Salesforce fell 4.15%. IBM eased 2.25% in the session before its after-hours report landed exactly in line. The pattern is now too consistent across multiple sessions to wave off as noise: capital is rotating out of subscription-software names and into the chip and infrastructure layer underneath them, a split this letter will be watching for confirmation in Thursday's actual trading session.

Broadcom (AVGO) +2.67% — sector's best mover Wednesday, riding the same AI-infrastructure current as chip peers.

ServiceNow (NOW) -6.47% — worst single mover across the entire Dominator roster, part of a broader software selloff.

YELLOW

XLV closed Wednesday at $159.43 (-0.51%). Current CCI -13.95 vs. prior session -14.40, vs. 10-session trailing average +46.62. Current reading exceeds prior but trails the 10-session average — mixed signal, verdict holds YELLOW.

Health Care slipped 0.51% Wednesday in a session with no single dominant headline. Johnson & Johnson was the standout, gaining 2.00% on an otherwise unremarkable day for sector news. UnitedHealth gave back 1.16% and Eli Lilly eased 1.05%, both consolidating after recent strength; AbbVie fell 1.09%. Merck, Thermo Fisher and Abbott all posted modest gains, while Danaher and Bristol-Myers were roughly flat to slightly lower. Nothing here rises to the level of a sector-defining story — this is a board still working off recent moves rather than reacting to new information.

Johnson & Johnson (JNJ) +2.00% — sector's best mover, no specific catalyst identified.

UnitedHealth (UNH) -1.16% — giving back part of a recent Zacks-upgrade-driven rally.

RED

XLF closed Wednesday at $56.05 (-0.11%). Current CCI +53.17 vs. prior session +55.87, vs. 10-session trailing average +99.56. Current reading trails both prior and average — momentum verdict holds RED.

Financials were essentially flat Wednesday (-0.11%), with the sector's momentum verdict still stuck in RED territory despite an otherwise unremarkable session. BlackRock led with a 1.77% gain, and Goldman Sachs (+1.16%) and Morgan Stanley (+0.97%) both extended recent strength among the investment-bank cohort. Wells Fargo was the weak spot, falling 1.50%, with Mastercard down 1.17% and Visa off 0.67% as the payments names lagged the broader group. JPMorgan added a modest 0.86%.

BlackRock (BLK) +1.77% — sector's best mover, extending a multi-session run.

Wells Fargo (WFC) -1.50% — sector's weakest mover Wednesday.

RED

XLY closed Wednesday at $114.02 (-0.74%). Current CCI -111.74 vs. prior session -83.55, vs. 10-session trailing average -10.94. Current reading trails both prior and average — momentum verdict holds RED.

Consumer Discretionary fell 0.74% Wednesday, and the sector's worst mover — Nike, down 1.75% — had nothing to do with the evening's real story. Tesla eased 1.30% in the regular session, hours before reporting an earnings miss after the close ($0.33 actual vs. $0.50 estimated) alongside a revenue beat and management's cautious robotaxi commentary; Thursday's session is the first chance for that news to actually move the stock. Amazon slipped 1.09% ahead of its own report next week. Lowe's was the sector's lone standout, up 0.41%, with TJX also modestly positive.

Tesla (TSLA) -1.30% in the regular session — reported an EPS miss after the close: $0.33 actual vs. $0.50 est., revenue beat, cautious robotaxi commentary.

Nike (NKE) -1.75% — sector's worst regular-session mover.

RED

XLC closed Wednesday at $109.20 (-0.75%). Current CCI -0.63 vs. prior session +19.69, vs. 10-session trailing average +69.10. Current reading trails both prior and average — momentum verdict holds RED, sector's weakest session-percentage move Wednesday.

Communication Services posted the sector board's weakest session, down 0.75%, even as it contained the day's single best Dominator mover: AT&T gained 3.50% after beating on premarket earnings ($0.65 actual vs. $0.59 estimated), despite a slight revenue miss. That strength was more than offset elsewhere. Meta fell 2.58%, the sector's worst mover, and Alphabet eased 1.46% in the regular session before its after-hours report — a $9.11 EPS figure inflated by a one-time item, a record cloud-revenue beat, and the company's first-ever negative free-cash-flow quarter, landing alongside a fresh $1 billion EU antitrust fine. Comcast fell 1.22%; Verizon, ahead of its own Friday report, gained 1.16%.

AT&T (T) +3.50% — sector's best mover, premarket EPS beat ($0.65 vs. $0.59 est.).

Meta (META) -2.58% — sector's worst mover Wednesday.

YELLOW

XLI closed Wednesday at $178.85 (+0.11%). Current CCI -100.04 vs. prior session -103.79, vs. 10-session trailing average -53.04. Current reading exceeds prior but trails the 10-session average — mixed signal, verdict holds YELLOW.

Industrials edged up 0.11% Wednesday, led by Deere's 3.48% gain — the sector's best mover and one of the stronger single-name moves on the entire board. Boeing added 1.88% and Lockheed Martin 1.43%, while Honeywell gained 1.36% in the regular session ahead of Thursday's premarket report, which has since landed as a clean beat: $1.95 actual EPS vs. $1.80 estimated, the company's first report since completing its three-way separation. Union Pacific eased a modest 0.19% ahead of its own Thursday premarket report. Caterpillar and GE were roughly flat.

Deere (DE) +3.48% — sector's best mover Wednesday.

Honeywell (HON) +1.36% in the regular session — reported a premarket beat Thursday: $1.95 actual vs. $1.80 est.

GREEN

XLE closed Wednesday at $59.20 (+1.20%). Current CCI +150.27 vs. prior session +139.18, vs. 10-session trailing average +113.76. Current reading exceeds both prior and average — verdict upgrades to GREEN.

Energy was the cleanest sector on the board Wednesday — every one of its five Dominators closed higher, and the ETF's momentum verdict flipped to GREEN. Schlumberger led with a 2.32% gain, followed by Exxon (+1.81%) and ConocoPhillips (+1.10%), as Brent crude climbed above $98 a barrel on news of a Houthi strike on Red Sea shipping lanes — the same geopolitical premium this letter has flagged building for several sessions running. Chevron and EOG both added roughly 1% as well. A full sector sweep to the upside on five names is not a common reading on this board, and it lines up cleanly with the crude-price move behind it.

Schlumberger (SLB) +2.32% — sector's best mover Wednesday.

Exxon (XOM) +1.81% — second-best mover, tracking the Brent rally.

YELLOW

XLP closed Wednesday at $84.38 (+0.38%). Current CCI +16.93 vs. prior session -12.58, vs. 10-session trailing average +21.11. Current reading exceeds prior but trails the 10-session average — mixed signal, verdict holds YELLOW.

Consumer Staples gained 0.38% Wednesday, almost entirely on the strength of Philip Morris, which jumped 3.33% after beating premarket estimates on both lines — $2.20 actual EPS vs. $2.05 estimated, and revenue of $11.19 billion against $10.60 billion expected. Procter & Gamble and Pepsi both posted modest gains, while Altria fell 1.12% and Walmart eased 0.96% in an otherwise quiet session for the rest of the group.

Philip Morris (PM) +3.33% — sector's best mover, premarket beat: $2.20 actual EPS vs. $2.05 est.

Altria (MO) -1.12% — sector's worst mover Wednesday.

GREEN

XLU closed Wednesday at $45.93 (+2.25%), the sector's largest single-session move on the board. Current CCI +52.12 vs. prior session -153.09, vs. 10-session trailing average +0.98. Current reading exceeds both prior and average — verdict upgrades sharply to GREEN.

Utilities posted the single largest sector move on the entire board Wednesday, up 2.25%, and every one of its three Dominators closed higher. Southern Company led with a 2.08% gain, followed by NextEra Energy (+1.68%, in its first session since a premarket earnings report) and Duke Energy (+1.62%). This is the second consecutive clean sweep for a defensive-sounding sector that has been trading, in practice, like a growth story — the same AI-era power-demand thesis this letter has tied to Materials' recent strength in copper continues to show up here as well.

Southern Company (SO) +2.08% — sector's best mover Wednesday.

NextEra Energy (NEE) +1.68% — first session following a premarket earnings report.

YELLOW

XLRE closed Wednesday at $45.01 (-0.42%). Current CCI +74.90 vs. prior session +105.23, vs. 10-session trailing average +56.08. Current reading trails prior but exceeds the 10-session average — mixed signal, verdict holds YELLOW.

Real Estate slipped 0.42% Wednesday, dragged down almost entirely by Prologis, which fell 3.49% — the second-worst single move across the entire Dominator roster Wednesday, behind only ServiceNow. No specific catalyst has been identified for the move as of this writing. American Tower gained 1.63% and Equinix was roughly flat, both holding up better than the broader sector reading.

Prologis (PLD) -3.49% — sector's worst mover; no confirmed catalyst identified as of this writing.

American Tower (AMT) +1.63% — sector's best mover Wednesday.

GREEN

XLB closed Wednesday at $50.82 (+1.44%). Current CCI -36.07 vs. prior session -123.21, vs. 10-session trailing average -89.17. Current reading exceeds both prior and average — verdict upgrades to GREEN.

Materials gained 1.44% Wednesday and joined Technology, Energy and Utilities as the board's fourth green sector — the widest the momentum board has read all cycle. Ecolab led with a 1.01% gain, followed by Linde (+0.72%) and Sherwin-Williams (+0.46%), a broader-based advance than the copper-and-gold-driven story that carried this sector a session earlier. All three Dominators closed higher, the third clean sweep among Wednesday's green sectors alongside Energy and Utilities.

Ecolab (ECL) +1.01% — sector's best mover Wednesday.

Linde (LIN) +0.72% — second-best mover.

Note Technology's placement in this table: the ETF closed down 0.28% even as its CCI(20) verdict holds GREEN — a reminder that the momentum verdict measures the shape of the trend, not Wednesday's raw percentage move. The real story inside that sector isn't the headline number at all. It's ServiceNow's 6.47% drop sitting in the same eleven-name basket as Broadcom's 2.67% gain — two Dominators in the same sector moving in opposite directions by nearly nine points in a single session. That kind of internal split usually resolves into a story of its own within a week or two.

Chip and hardware names (AMD, Texas Instruments, Cisco) sit near the top of the entire 74-name roster year-to-date, while legacy enterprise-software names (Intuit, Salesforce, Oracle, ServiceNow, Adobe) sit at the bottom, each down more than a third. That is not a one-day rotation. It is a full-year one, and Wednesday's Technology-sector session — chips up, software down, in the same eleven-name basket — is that same divergence playing out in miniature in a single day's trading.

The single most useful number in this issue is not the sector board, and it is not any one of Wednesday night's three earnings reports. It is the year-to-date gap sitting inside Technology itself: AMD up 147% since January, Texas Instruments up 66%, Cisco up 48% — against Intuit down 55%, Salesforce down 36%, Oracle down 36%, ServiceNow down 35%, Adobe down 34%. Those are not eleven names moving together under one sector label. They are two entirely different trades wearing the same ticker-tape color, and Wednesday's session — chips green, software red, ServiceNow the board's worst mover, Broadcom near its best — was that same split compressed into a single day. Whatever conclusion the market eventually reaches about seat-based software economics in an agentic-AI world, it is being reached one session at a time, inside a sector this letter has been reporting as a single number for months. Watch the split, not just the sector.

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4 GREEN (Technology, Energy, Utilities, Materials) · 4 YELLOW (Health Care, Industrials, Consumer Staples, Real Estate) · 3 RED (Financials, Consumer Discretionary, Communication Services). Tuesday's board: 1 GREEN (Technology) / 4 YELLOW (Industrials, Energy, Materials, Real Estate) / 6 RED.

Methodology: CCI(20) computed from 35 sessions of daily OHLC via Massive Market Data grouped-daily aggregates. TP=(H+L+C)/3; SMA(TP,20); mean deviation = average absolute deviation of TP from SMA over the trailing 20-session window; CCI=(TP−SMA)/(0.015×mean deviation). 10-session trailing average computed over the 10 sessions immediately preceding the current session. Verdict: GREEN if current CCI > prior AND > 10-session average; RED if current < prior AND < average; otherwise YELLOW.

Philip Morris's EPS/revenue figures ($2.20/$2.05 EPS, $11.19B/$10.60B revenue) differ slightly from the $2.17/$2.04 EPS this letter published in Wednesday's issue — likely a data-provider revision between pulls; the newer figures are used throughout this issue. Honeywell's revenue-estimate figure returned by one data source appears inconsistent with the company's historical quarterly revenue run-rate and was omitted from published copy; actual revenue ($9.72B) is reported without an estimate comparison. Alphabet's $9.11 EPS figure is real but almost certainly inflated by a one-time item; framed as such rather than as a clean operating beat throughout. Sector-level YTD ETF percentages were not recomputed this issue; the Dominator-level YTD figures above were freshly computed against 2026-01-02 opens. Index levels (S&P 500, VIX) sourced via ETF proxies (SPY, VXX) rather than raw index quotes, consistent with prior issues. Prologis's -3.49% move has no confirmed catalyst identified as of publication.

Disclaimer: Sector Cycle Radar is an independent financial publication produced for informational and educational purposes only. Nothing in this issue constitutes personalized investment advice, a recommendation to buy or sell any security, or a solicitation of any kind. The editor and affiliated parties may or may not hold positions in securities mentioned; no such positions are currently disclosed and none are known as of publication. Momentum verdicts (CCI-based GREEN/YELLOW/RED readings) are technical indicators derived from historical price data and carry no predictive guarantee. Past performance is not indicative of future results. Data is sourced from Massive Market Data, Financial Modeling Prep, and named third-party outlets; while believed reliable, accuracy is not guaranteed. Consult a licensed financial advisor before making any investment decision.

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