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The Great Rotation: Buying the Tech Dip and Hiding in Utilities · The SPY Trader

• 0:00
  Welcome to Spy Trader .
• 0:02
  I'm your host , Barry Bullish , and it is 6 am on Wednesday , October 8th , 2025 , Pacific time .
• 0:10
  We are here to navigate the premarket landscape and figure out how to manage our trades after a recent rally gave way to some nervous consolidation .
• 0:18
  The US market is exhibiting mixed performance this morning after the S&P 500 and Nasdaq Composite hit new alltime highs earlier in the week .
• 0:29
  The SPDR S&P 500 ETF , or SPY , is flat , and we are seeing a significant sector rotation .
• 0:38
  Technology is currently lagging , with the Technology Select Sector SPDR Fund , XLK , down about 0.65% , as investors take profits after the massive AI rally .
• 0:52
  That rally was fueled by news like Advanced Micro Devices , or AMD , surging over 24% after announcing a massive chip deal partnership with OpenAI.Meanwhile , defensives are leading the charge .
• 1:06
  The Utilities Select Sector SPDR Fund and the Consumer Staples Select Sector SPDR Fund , XLP , are both strong outperformers today , confirming that caution is rising .
• 1:18
  The macroeconomic picture remains dominated by the Federal Reserve's dovish pivot .
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  The Fed cut its rate to a range of 4.00% to 4.25% back in July , and markets are now pricing in an 89% probability of another 25basispoint cut this month .
• 1:37
  This easing is largely a risk management cut to address a softening labor market , even though inflation remains sticky with Core PCE still at 2.9% .
• 1:47
  The 10year Treasury yield is slightly lower at 4.13% , which generally helps growth stocks .
• 1:55
  But the overall caution is real , emphasized by gold futures crossing 4,000 per ounce for the first time .
• 2:03
  This indicates a strong flight to safety , reflected in the SPDR Gold Shares ETF , GLD .
• 2:10
  We are keenly awaiting the FOMC Minutes later today for more detail on the central bank's future path .
• 2:18
  This rotation away from highflying growth sectors like Technology and Consumer Discretionary , which was down a significant 1.74% , and into incomefocused defensives like Utilities , tells us that investors are preparing for economic moderation while still loving the longterm AI story .
• 2:36
  We need to focus on quality and strategic diversification .
• 2:40
  My strategy today focuses on three buckets .
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  First , regarding growth , the longterm AI trend is firmly intact .
• 2:50
  Use the current pullback in the Invesco QQQ Trust , QQQ , as a chance to buy on dips .
• 2:57
  Advanced Micro Devices , AMD , is a compelling stock pick , as its massive recent partnership validates its key role in AI infrastructure .
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  Second , we need stability and income .
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  Given the softening labor market that prompted the Fed cuts , I recommend overweighting defensive sectors .
• 3:17
  Look at the Utilities Select Sector SPDR Fund , UTIL , which offers high dividends and is attractive in a lowerrate environment , or Consumer Staples like PepsiCo , PEP , which reports earnings later this week .
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  Third , for hedging , maintain core bond holdings .
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  The Vanguard Total Bond Market ETF , BND , remains an excellent hedge against a sharp economic slowdown .
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  Also , consider a small allocation to the SPDR Gold Shares ETF , GLD .
• 3:49
  Its move past 4,000 signals strong safehaven demand against uncertainty .
• 3:55
  That’s it for this update .
• 3:56
  Good luck trading , and I’ll catch you next time here on Spy Trader .