The market reacted negatively to Federal Reserve Chairman Kevin Warsh’s speech from Jackson Hole on Friday. NVIDIA’s earnings were unable to provide much support for either the SOX Index or the Nasdaq. More importantly, the Nasdaq’s inability to confirm new highs alongside the other three major indexes remains bothersome. The Russell 2000 also rolled over on Friday and closed below its key 50-day SMA—a development worth watching closely. Software continues to act constructively, with most cybersecurity stocks showing good relative strength. That said, many of these names have already made meaningful moves and could use additional time to consolidate before making their next advance. The same can be said for medical and healthcare stocks. Many of the leading biotech and genomics names have come a long way and would benefit from some time to digest their recent gains. Strong stocks don’t always need to move higher immediately. Sometimes, the healthiest thing they can do is simply pause and build a new area of support. Beyond software and healthcare, leadership is currently showing up in oil and energy-related stocks, materials, financial services, and Bitcoin-related names. There are plenty of companies within these groups that qualify as legitimate growth stocks, and their strength is undoubtedly helping support the major indexes. The problem is that this leadership has not been enough to offset the significant rotation out of many of the leading semiconductor, memory, and AI stocks—the areas that have traditionally represented the market’s highest-quality growth leadership. This rotation helps explain why the major indexes have made relatively little progress since the Nasdaq and S&P 500 reached their highs at the beginning of June. The question now is whether the market can resolve higher next week or whether the weakness in the Russell 2000 is an early warning that the other major indexes could follow. Friday’s action deserves respect, particularly given the deterioration in some areas of traditional growth leadership. This has not been an easy environment. If you’re making progress, keep doing what you’re doing. There is no reason to change a process that is working. But if, like me, you’re primarily a position trader and trend follower, don’t be surprised if you’ve struggled to gain traction. The market has been choppy, and choppy markets are designed to make traders question their process. This is where discipline matters. When the market isn’t offering clean opportunities, there is nothing wrong with reducing exposure, being more selective, and waiting for the environment to improve. The goal isn’t to always be fully invested. The goal is to be positioned when the market gives you something worth owning. NOTE: Earnings season is winding down, but don’t let your guard down. Always check a company’s upcoming earnings date before initiating a position. Even the strongest-looking setup can carry significant risk as an earnings report approaches.