Tech ETF XLK Flatlines at $141 as Rotation Drains Momentum—Is the Growth Trade Dead?

You know something’s wrong with the market when the Technology Select Sector SPDR ETF (XLK) can’t even muster a penny of movement. Four closes at $141.06, not a tick higher, not a tick lower. For an ETF that’s supposed to capture the animal spirits of Silicon Valley, this is the financial equivalent of a flatline on the EKG. The question is whether this is just a pause before the next leg up, or the early signs of rigor mortis in the growth trade.

Let’s not sugarcoat it: tech is out of favor. The headlines are full of sector rotation stories, with utilities, industrials, and even boring old staples suddenly looking sexy. Seeking Alpha’s “Chart of the Day” notes that seven out of eleven S&P 500 sectors were up last week, but tech was not invited to the party. The AI bubble that drove XLK to dizzying heights in 2025 has deflated, and now the ETF is stuck in purgatory while the market decides what comes next.

The numbers don’t lie. XLK has been pinned at $141.06 for four straight sessions, a level that used to be support but now feels like quicksand. The 50-day moving average is rolling over, RSI is stuck in the mid-40s, and volume is anemic. There’s no conviction from either bulls or bears, just a collective shrug. Meanwhile, Goldman Sachs is warning of more selling ahead, with CTAs ready to hit the sell button if the S&P 500 loses momentum (source: MarketWatch). In other words, the algos are circling, and they’re not looking to buy the dip.

Macro headwinds aren’t helping. Inflation data is due Friday, and Wall Street is bracing for a nasty surprise (source: WSJ). If prices spike, the Fed could get even more hawkish, pushing up yields and crushing growth stocks further. At the same time, the speculative narrative that powered tech in 2025 has unraveled. Investors are no longer willing to pay nosebleed multiples for “AI-powered” revenue projections that may or may not materialize by 2030.

The bigger picture is even more sobering. The rotation out of tech isn’t just a blip, it’s a structural shift. As the market digests the end of easy money, capital is flowing into sectors with real earnings, cash flow, and pricing power. Utilities and industrials are suddenly the darlings of the smart money, while tech is left holding the bag. The days of buying every dip in XLK are over, at least for now.

But don’t write the obituary just yet. Tech has a habit of coming back from the dead, usually when everyone least expects it. The key is to watch for signs of capitulation. When the last retail bull throws in the towel and the headlines declare the “death of growth,” that’s when the real bottom forms. Until then, expect more sideways action and the occasional fake-out rally.

Strykr Watch

Technically, XLK is trapped in a range between $140.50 support and $143.00 resistance. The 200-day moving average is lurking just below at $139.80, a level that could act as a magnet if selling accelerates. RSI is uninspiring at 44, and MACD is flat. There’s no momentum, no trend, just a battle of attrition. If XLK breaks below $140.50, the next stop is $137.50, a level that coincides with the October 2025 lows. On the upside, a close above $143.00 could trigger a short squeeze, but that would require a serious shift in sentiment, probably from a dovish Fed or a blockbuster earnings report from a mega-cap tech name.

Options markets are pricing in low volatility, but skew is starting to build on the downside. This suggests that institutional players are hedging for a possible break lower, even if they’re not outright bearish yet. Watch for a spike in put volume as an early warning sign.

The risk here is complacency. When everyone is waiting for the next catalyst, the first real headline can trigger an outsized move. If inflation data disappoints or the Fed signals more hikes, XLK could break down fast. On the other hand, if the data surprises to the downside or the Fed blinks, tech could stage a vicious rally. The key is to stay nimble and not get married to either side of the trade.

The opportunity is in the extremes. If XLK breaks the range with volume, the move will be sharp and probably one-sided. This is not the time to be a hero, but it is the time to be ready.

Strykr Take

The growth trade isn’t dead, but it’s definitely on life support. XLK is stuck in a no-man’s land, waiting for a catalyst. The next move will be fast and probably brutal, so keep your stops tight and your mind open. When tech comes back, it will come back hard, but don’t try to catch the falling knife until you see real capitulation. For now, watch the range and be ready to move when the market finally wakes up.