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 remain strong, but the experience underneath the surface has been far more complicated.
SPY and QQQ both finished the week at new all-time weekly closing highs, with growth and the Magnificent Seven continuing to lead. At the same time, traders have had good reason to feel frustrated: breadth has been weak, bonds have been under heavy pressure, the dollar continues to rise, and many individual stocks have struggled.
This week, however, we started to see some signs of improvement beneath the surface.
Equal weight bounced sharply from support. Financials also bounced. Consumer discretionary and staples both strengthened. DIA improved, and the percentage of S&P 500 stocks above their 50- and 200-day moving averages turned higher after weeks of deterioration.
That doesn’t mean the market has suddenly become easy, or that every weak area has been repaired.
But it does suggest that some of the laggards may finally be starting to stabilize.
The key distinction remains the same: a frustrating market is not necessarily a bearish market.
The leaders didn’t necessarily need to get stronger. The laggards needed to stop getting weaker.
This week, we saw some early evidence of that.
Key Takeaways
• S&P 500: SPY finished at a new all-time weekly closing high with price above rising, properly aligned moving averages. The larger trend remains healthy.
• Nasdaq / Growth: QQQ also closed at a new all-time high, and growth remains the primary leadership area of the market.
• Dow & Small Caps: DIA improved with a strong bounce from support and moved back above its declining 4-week moving average. IWM is stabilizing near its rising 40-week moving average but still has work to do below anchored VWAP.
• Equal Weight: RSP confirmed last week’s hammer with a strong bounce back above the 4-week moving average, offering early evidence that participation may be broadening.
• Breadth: The percentage of S&P 500 stocks above their 50- and 200-day moving averages turned sharply higher after several consecutive weeks of deterioration.
• Magnificent Seven: Leadership remains intact, with the group at new highs. Microsoft posted another new weekly closing high, while Amazon improved and Meta continues its high-level consolidation.
• Semiconductors: SOXX pulled back after two strong weeks and gave back part of its recent breakout move. The next test is whether buyers defend the rising moving averages and nearby support.
• Financials: XLF bounced strongly from the 40-week moving average and anchored VWAP area after several weeks of weakness. Follow-through now becomes important.
• Consumer Groups: Both discretionary and staples improved significantly this week, although their relative-strength relationship remains largely unchanged.
• Bonds & Yields: AGG, TLT, and HYG finally found some relief after severe selling pressure. The next question is whether that relief can continue and whether yields begin to cool.
• U.S. Dollar: The dollar advanced for a fourth consecutive week and remains in one of its strongest stretches in months.
• Bitcoin & Volatility: Bitcoin gave back much of the prior two weeks’ advance as it digests its breakout. VIX remains exceptionally quiet, with little evidence of broad equity-market stress.
• The Big Picture: The major indices remain strong while several lagging areas are beginning to improve. The leaders didn’t need to get stronger — the laggards needed to stop getting weaker. This week provided some early evidence that may be happening.
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.
