Trending Analysis for Week 13
This will be week 13 of the year which corresponds to the end of the 1st quarter. It has been a choppy quarter to say the least. I am not much interested in ruminating over what has already happened. There will be enough articles available to read on that. I am only concerned with how the markets are trending now and what that means for the near future from a trading perspective.
There is indeed no definitive signs of reversal for the stock market yet. This despite the fact that by most measures the markets would be considered oversold.
The only good indicator I see as a potential positive indicator is that the MACD histogram for most markets seem to be turning positive - just about.
Let’s dive in.
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Major Stock Market indices
SPY
The SPY had a slight positive week after 4 straight losing weeks. However, price could not close above the 50-week moving average after trading over it. If we review the last candle in the weekly chart below, we see that bulls and bears tussled quite a bit and price closed right in the middle of that tussle. No winner and no loser.
The daily chart shows the true nature of the tussle between the bulls and the bears.
Overall, the SPY price action was not encouraging. The only thing I can say is that we are rising a little above oversold levels on the RSI and the MACD histogram turned positive from a very low level.
I still think there is a good chance for a short-term bounce. However, traders should also be prepared for a meandering sideways price action for some time. Also, if some key levels are broken - for instance if price makes a lower low below the 3/13 low - then traders should be ready to close long trades. That is how I am preparing.
QQQ
Much of the trending for the QQQ is very similar to the SPY. So, I am not going to repeat. For trading purposes, I prefer the QQQ to the SPY. No real reason other than I feel the QQQ moves a little more (slightly higher volatility) than the SPY.
IWM
We see the death cross in the IWM. The 50-day moving average fell below the 200-day moving average. Here is the daily chart.
Given the sharp fall in the price, the death cross was bound to happen even if the price stabilized. The price has stabilized for now. But we do not know yet if we have seen the near-term bottom. If the next price action creates a higher low and then a higher high, the chances will increase.
Thye price was higher over the week. But the price action was not conclusive for the bulls or the bears. I call it neutral and indecisive for now.
Similar to the SPY, the MACD and RSI for the IWM are showing positive signs with the MACD crossover from low levels and the RSI starting to rise from oversold levels. So, despite the death cross, I think the odds favor a near-term bounce.
Underlying Strength
There was some improvement in the underlying strength as measured by the percentage of stocks above their 20-day moving average for all the major indices. Nothing to be too excited about though.
ROI last week
For short-term trading I like to see the actual ROI for the last week.
All of them were positive for the week. But the QQQ and SPY had the smallest gains. Not sure what to make of that. On one hand it indicates the stock market is broadening. On the other hand, we know we cannot have a proper reversal without the participation of the big stocks. Nothing to glean from this data point as of now.
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SPX Sectors
Mostly it is a sea of red all over the trending heat map. But there are some signals we can glean by checking which sectors are improving and which are deteriorating.
XLP and XLRE are deteriorating. This is good because these are the defensive sectors.
XLC, XLF, XLI and XLK are improving. This is also good because these are the risk-on sectors.
Here is the ROI for the week.
Interesting that XLK, which is biggest sector within the SPX at 30% weight, was essentially flat. The next 2 largest SPX sectors XLF and XLV had healthy gains.
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Big Tech
I track the following as Big Tech stocks. They are all within the 2 ETFs MAGS and FNGS.
It is again a sea of red but there are some green shoots sprouting.
TSLA, NFLX, MSFT and AMZN are improving even though not all of their weekly returns will tell you that.
NFLX is actually trending bullish. And the MSFT price just went above the 20-day moving average.
TSLA, by the way, is down 9 weeks in a row.
Interesting that price found support at the 200-week moving average.
NFLX price action looks the best right now.
Meanwhile NVDA had the death cross this week. And was also the worst performer of the lot.
Nothing is ever completely lost. If that was a higher low made this week, we will know soon. If we see price go over the high of last week before, we will have made a higher low and higher high sequence. Anything is possible after that.
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Countries & Regions
I track 30 tickers and the best performer for last week was INDA (India). The daily chart below shows the reversal after 6 months of decline.
On FXI (China) I do not think the bull run is over. This may just be a little bit of profit taking. Price closed just above the 20-day moving average.
Here is the full list of tickers I track with their ROI for last week.
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Other Sectors
The Russell 2000 (IWM) will not do well without the Regional Banks (KRE) doing well. We are yet to see a proper price reversal from the KRE. It has risen slightly above from oversold levels.
The sector very important for the QQQ and SPY is the SMH (Semiconductor). The price action for SMH has not been helpful for over 6 months now.
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Commodities
The only way I check Bitcoin is over the last 24 hours and what direction is price going. So, as of this writing (7:15pm on 3/23/2025 Sunday) I have good news:
And please do not ask me why I categorize Bitcoin under commodities. I just do it, ok?
We have all been talking about Gold. But have you looked at Copper. Here is the CPER daily chart.
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Have a great week ahead.