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Craig Shapiro highlights a defensive rotation in markets within an ongoing uptrend. He observes that ES remains flat close to all-time highs, energy has declined 4.41 percent following a collapse in oil, and discretionary consumer stocks are leading gains.
This market activity, according to Shapiro, points to positioning for slower economic growth rather than an imminent recession.
Shapiro previously noted overbought market conditions, with the SPY RSI reaching 76.3 and breadth declining sharply on May 13th, 2026, according to his earlier observations. He also highlighted a period when bonds fell and the U.S. dollar strengthened after expiry events in a recent market update. These snapshots provide context for his current focus on sector rotations and growth expectations.