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 actual trade setups.
Weakness Continues as Markets Test Key Support
Over the past several weeks we’ve been pointing out cracks developing beneath the surface of the market. Last week those cracks widened as major indices began breaking below important intermediate trend levels.
This week we saw continued downside pressure, with the S&P 500 testing its 200-day moving average, QQQ approaching long-term trend support, and several breadth indicators confirming that participation across the market is deteriorating.
In this week’s video we review:
The S&P 500 testing the 200-day moving average
Continued weakness across major indices
Global markets and macro asset behavior
Sector rotation and defensive positioning
Breadth and participation indicators
Key economic events to watch next week
Leadership continues to weaken as fewer stocks remain in intermediate and long-term uptrends. At the same time, macro asset behavior suggests a more defensive tone developing across markets, with strength in the dollar and continued demand for gold alongside elevated volatility in crude oil.
Breadth data reinforces the shift. The percentage of stocks above their 50- and 200-day moving averages has fallen sharply, while bullish percent indices have moved into bear-confirmed status for both the S&P 500 and Nasdaq 100.
Importantly, however, the market is not yet at extreme levels. Major indices are only modestly below recent highs and several indicators remain far from deeply oversold territory. This suggests the market may still be in a process of repricing risk rather than experiencing a full capitulation move.
For now, the message from the charts remains consistent:
Go slow. Be patient. Manage risk.
Looking ahead, traders will be watching PPI on Wednesday and the FOMC interest rate decision later that afternoon, both of which could influence market direction and volatility in the week ahead.
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 actual trade setups.
Important: This content is provided for educational purposes only. If you’re reading this online, please review the full disclosure here.
