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 under pressure following another volatile week, highlighted by sharp selling on Friday that sent the Nasdaq down nearly 3.5%.
The Nasdaq 100 has now declined for three consecutive weeks and is testing an important technical reference point near its rising 40-week moving average. The S&P 500 is also struggling beneath declining shorter-term moving averages, while several large-cap technology leaders are approaching significant support levels.
But beneath the surface, the story remains more nuanced.
The equal-weight S&P 500 continues to outperform, and market breadth measures are still improving. Capital continues rotating toward energy, healthcare, utilities, and consumer staples, while technology and communication services remain among the weakest sectors.
Relative-strength relationships continue favoring value over growth and low volatility over high beta, suggesting that investors remain defensively positioned.
For swing traders, the implications haven’t changed much. Despite improving breadth, we’re still not seeing an expanding universe of attractive individual stock setups.
In this week’s Weekly Charts, we examine the Nasdaq’s important technical test, the continued rotation beneath the surface, and what the shorter-term price structure tells us about the trading environment.
The approach remains simple: Slow down, remain selective, manage risk, and let price show us when conditions begin to improve.
Key takeaways
Nasdaq approaches critical support. QQQ has declined for three consecutive weeks and is testing its rising 40-week moving average, an important longer-term technical reference point.
Major indices remain under pressure. SPY continues weakening beneath its shorter-term moving averages, while DIA and IWM have also struggled to sustain upside progress.
Market breadth continues improving. RSP advanced again, and the percentage of S&P 500 stocks above their 50-day and 200-day moving averages continued rising despite weakness in the capitalization-weighted indices.
Defensive rotation persists. Energy, utilities, consumer staples, and healthcare continue outperforming, while technology and communication services lag.
Large-cap leadership remains vulnerable. MAGS declined for a third consecutive week, with Google and NVIDIA approaching important technical support areas.
Credit markets remain mixed. Treasuries continue strengthening as yields decline, while high-yield bonds remain in a weaker technical structure.
Trading conditions remain challenging. Improving breadth hasn’t translated into more high-quality swing-trading opportunities. The shorter-term roadmap continues to show lower highs and lower lows beneath a declining 5-day moving average.
Patience remains important. Smaller positions, selective entries, and respect for multiple-timeframe trends remain appropriate until price demonstrates more constructive behavior.
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.
