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The past few days have made the rotation into staples impossible to ignore…
Consumer Staples (XLP) is up 5.9% over the past week while the S&P 500 (SPY) is down more than 3% and is now negative on the year after Thursday’s close.
When a defensive sector outperforms the market by that much in such a short window, it’s telling you exactly where money is moving.
You’re probably not watching Consumer Staples right now. And I get it — it’s not the flashy sector anyone gets excited about. But when a defensive group starts climbing into the top portion of my sector rankings after being missing for ages, that grabs my attention for a reason.
Moves like this matter because when defensive sectors start behaving like growth plays, it usually means participation is broadening. That kind of action shows what’s happening under the surface long before the major indexes catch up.
Staples also tend to have strong seasonality in February, which just adds more weight to the rotation.
And none of this is theoretical — the charts are backing it up.
The Trade Nobody Expected
Walmart (WMT) is the perfect example. It probably sounds like the most boring stock you could trade. Nobody sits around bragging about loading up on WMT.
But once you actually look at the chart, you can see why overlooking these “boring” names can cost you real money.
The setup was clean, momentum was strong and the breakout wasn’t subtle. It showed up on my Lotto Board (pictured below with the WMT trade at the bottom) because the technicals were screaming for attention, not because it’s an exciting brand.
I closed this trade out for a cool 240% gain on Tuesday. A consumer staples giant delivering that kind of return isn’t random — it’s what happens when a defensive sector starts acting like an offensive one.
Walmart’s move — up 9.5% on the underlying alone the past week after Thursday’s close — is a reminder that strong setups don’t care about hype. They care about rotation, strength and timing.
A Broader Market Picture
This rotation isn’t just happening in staples. Energy (XLE), Materials (XLB), Industrials (XLI) and Health Care (XLV) are also stepping up.
Energy’s benefiting from improving demand trends. Materials and Industrials are gaining traction as capital flows into areas tied to production and infrastructure. Healthcare — including names like Eli Lilly (LLY) — has been ripping higher on strong earnings and steady technical setups.
When that many groups are participating, the market’s in a healthier place even if the indexes are chopping around. You don’t need a runaway bull market when multiple sectors are giving you clean, high‑probability opportunities.
The takeaway’s pretty simple: Don’t write off the sectors that seem dull. The market usually shows its next move through rotation, not headlines. And when a defensive sector starts putting up growth‑style performance while other key groups also strengthen, that’s a landscape worth paying close attention to.
Graham Lindman
Graham Lindman Trading
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