BTIG analysts recently raised concerns about the S&P 500 index, suggesting it might face a significant downturn below the previous week’s low. This warning comes as the index failed to surpass the prior week’s high for the first time this year and experienced a three-day decline, a trend unseen since January. Additionally, it hasn’t touched its 50-day moving average (DMA) since November, indicating potential turbulence ahead.

“While this doesn’t necessarily signal a medium-term bearish outlook and doesn’t break any records, it does suggest that a significant test could be on the horizon sooner rather than later,” noted the analysts in a recent report.

Furthermore, the latest NAAIM Exposure Index hit its highest level since November 2021, indicating a notable shift in market sentiment. This change coincides with signs of fatigue in the semiconductor sector, coupled with historical data suggesting that April tends to be a challenging month for the SOX index.

However, amidst these concerns, the Energy and Materials sectors have stood out as top performers in recent weeks, surpassing other sectors by a considerable margin. Analysts pointed out that Energy, in particular, has been the best-performing sector since the end of 2021, showing a 63% increase compared to a 22% rise in the tech sector.

Despite the sector’s strong performance, there appears to be limited investor interest. Analysts believe that if Energy breaks out from its multiyear resistance, investor enthusiasm could soar.

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