Taking the analysis further
If you want to go deeper than the weekly charts — including how the levels translate into actual trade planning and risk management — you can follow the work Brian Shannon and I do at Alphatrends.
That’s where we walk through the same market structure in real time and apply the process to current trade setups.
Summary
The major indices continue to tell a constructive but increasingly selective story.
The S&P 500 held last week’s breakout, completing a three-week progression from support at the rising 10-week moving average, to breakout, and now acceptance. The Nasdaq remains the clear leader, closing at new weekly highs as growth, semiconductors, software, and several of the Magnificent Seven continue to show strength.
Beneath the surface, however, participation remains narrow. Equal weight continues to lag, value is struggling, financials remain weak, and both consumer discretionary and staples are in short-term downtrends. Bonds are among the weakest areas of the market, while Treasury yields and the U.S. dollar continue to push higher.
Despite those areas of weakness, volatility remains subdued and high beta continues to significantly outperform low volatility — evidence that investors are still willing to embrace risk, just very selectively.
The message remains straightforward: the market is strong, but only in the right places. Continue to follow the areas where price is being rewarded, avoid the areas where it isn’t, and let price — not prediction — guide the next move.
Key Takeaways
S&P 500: Last week’s breakout continues to hold. The larger trend remains intact after the recent test of the rising 10-week moving average.
Nasdaq / Growth: The clear leadership area. The Nasdaq posted another new weekly closing high, while growth continues to strongly outperform value.
Dow & Small Caps: Both remain weaker than the growth indices, but DIA and IWM found buyers near important areas of potential longer-term support, including their rising 40-week moving averages.
Semiconductors: One of the strongest areas of the market. SOXX has built on its recent breakout and moved back above the August highs.
High Beta vs. Low Volatility: Continues to strongly favor high beta, suggesting investors remain willing to take risk despite weakness elsewhere.
Breadth: Participation continues to deteriorate. Fewer S&P 500 stocks are holding above their 50- and 200-day moving averages, while bullish percent indexes are approaching levels where we begin watching more closely for potential reversals.
Equal Weight: RSP continues its orderly decline and remains well behind the cap-weighted S&P 500, reinforcing just how concentrated the recent strength has become.
Bonds & Yields: A major area of weakness. AGG, TLT, and HYG remain under heavy selling pressure while Treasury yields continue to rise sharply.
Financials: XLF has reversed several weeks of prior strength and is testing an important potential support area around 53–54.
U.S. Dollar: Strong for a third consecutive week and back above an important area of prior resistance.
China: Remains under pressure following another significant move lower and has considerable work to do before the chart improves.
Volatility: Remains low and relatively quiet, with no significant signs of stress showing up in volatility.
The Big Picture: This is not broad-based strength. Growth and technology are doing much of the heavy lifting while several other areas struggle. That isn’t necessarily bearish — it means selectivity remains essential.
References & Chart Resources
Chart School
https://www.trading-adventures.com/t/chart-school
The Bullish Percent Index – A Technician’s Perspective
Relative Strength – What Is It Really?
Take the analysis further
If you want to go beyond the weekly charts — including how the levels translate into real trade planning and risk management — you can follow the work Brian Shannon and I do at Alphatrends.
That’s where we review the markets in real time and walk through how the same principles are applied to current trade setups.
Important: This content is provided for educational purposes only. If you’re reading this online, please review the full disclosure here.
