If one word could characterize this week’s stock market price action, it would be “sideways.” At least it’s better than trending lower.

The stock market seemed comfortable with the Federal Reserve’s message on Wednesday, but lost that upside momentum and wasn’t able to follow through on the upside move until the last 30 minutes of Friday’s trading.

The Dow ($INDU), S&P 500 ($SPX), and Nasdaq Composite ($COMPQ) managed to eke out gains, ending the week on a slightly optimistic note.

On the bright side, the Cboe Volatility Index ($VIX) pulled back from its March 10 level. Even quadruple witching Friday—when contracts for stock index futures, stock index options, stock options, and single-stock futures all expire—didn’t see volatility spike too high. That said, the VIX is still elevated, relatively speaking, so we’re not exactly in complacent territory.

Quarterly earnings reports from Nike, Inc. (NKE), FedEx Corp. (FDX), and Micron Technology, Inc. (MU) didn’t help. The most troubling of the three is FDX. FedEx’s performance indicates the overall health of the U.S. economy. Tariffs, declining consumer confidence, and uncertainty about economic growth could be headwinds, for FedEx and other companies.

The weekly chart of FDX below shows the stock is trading below its 150-week exponential moving average (EMA) with its 40-week EMA trending lower. FDX has been underperforming the Industrials Select Sector SPDR (XLI) since early September 2024.

FIGURE 1. WEEKLY CHART OF FEDEX STOCK. FDX is trading below its 150-week EMA and underperforming the Industrial sector. Chart source: StockCharts.com. For educational purposes.

Be sure to save this chart to your ChartLists. It acts like a monitor to check the U.S. economy’s pulse.

Precious Metals Shine

But it’s not all negative. Gold and silver prices have trended higher with gold hitting an all-time high this week. The daily six-month chart of gold futures ($GOLD) below shows that gold prices are trading above $3,000 per ounce.

FIGURE 2. DAILY CHART OF GOLD FUTURES. Gold prices have rallied most of the year and could keep rising if investors invest in safe-haven assets such as gold. Chart source: StockCharts.com. For educational purposes.

In addition to trading above its 50- and 200-day SMAs, gold is outperforming the S&P 500. A rise in gold prices indicates risk-off sentiment, and, if investors continue to sell off stocks, gold prices could rise further. This is another valuable chart to monitor when uncertainty reigns.

Next week is heavy on macro data, so this back-and-forth movement could continue. Fasten your seatbelts.

End-of-Week Wrap-Up

• S&P 500 up 0.51% on the week, at 5667.56, Dow Jones Industrial Average up 1.2% on the week at 41,985.35; Nasdaq Composite up 0.17% on the week at 17,784.05.
• $VIX down 11.39% on the week, closing at 19.28.
• Best performing sector for the week: Energy
• Worst performing sector for the week: Utilities
• Top 5 Large Cap SCTR stocks: Elbit Systems, Ltd. (ESLT); XPeng, Inc. (XPEV); Palantir Technologies, Inc. (PLTR); Applovin Corp. (APP); Rocket Lab USA, Inc. (RKLB)

On the Radar Next Week

• March S&P Global PMI
• February PCE
• Q4 GDP Growth Rate (final)
• Fed speeches from Bostic, Barr, Kugler, and others

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Seeing that the earnings slate is light, this week we focus on certain stocks to watch during uncertain times.

If you are jittery and risk-averse, we have two safer (boring) stocks, plus one tech stock that has shown great relative strength compared to its peers. Let’s do a deep dive into all three.

American International Group (AIG)

Insurance stocks have done quite well in the current volatile environment. As inflation fears mount, it’s ironic that an inflationary sector is a good one to buy in the current cycle.

We can go with a basket of insurance stocks by adding the iShares U.S. Insurance ETF (IAK), which is up 7.3% YTD, but, for this article, let’s focus on one of its leaders, AIG.

Fundamentally, results have been solid and bolstered by a strong buyback program. AIG pays a dividend of 1.9%. Analysts, according to Bloomberg data, have the equivalent of 12 buys, 8 holds, and 0 sells with an average price target at current levels of $85.

FIGURE 1. WEEKLY CHART OF AIG. The stock is one of strongest within its sector and is likely to be more stable.

Technically, let’s keep it simple. Looking at multiple time frames, we are seeing breakouts. There are great risk/reward set-ups based on these patterns. It’s one of the strongest within the sector and looks attractive above $80. 

Shares won’t run up like a tech stock, but, in tougher and unpredictable times, look for more stable and slow growth with solid returns; thus, one of the best within the insurance sector.

John Deere (DE)

Another stock with great relative strength within the Industrial sector is DE. It’s up 11.3% year-to-date and outperforming both the Industrials Select Sector SPDR ETF (XLI) (up 0.2% year-to-date) and the S&P 500 (-4%).

Fundamentally, John Deere’s guidance was not solid. Tariff concerns were mentioned, but — and this is a BIG BUT — CEO John May noted in the call that “75% of all products that we sell in the U.S. are assembled here in the U.S.” This fits well with the narrative coming out of Washington.

FIGURE 2. WEEKLY CHART OF DE. After breaking out of a two-year base, it looks like a great setup.

Technically, we see another great set-up. Shares experienced a major break-out of a two-year base on a weekly timeframe. The daily chart, while a tad more choppy, looks solid as well. The risk/reward set-up is also favorable to the bulls.

Again, kinda boring, but pullbacks have been bought. An upside target of $540 over the next year is very plausible given the base it broke out of on the weekly. Use a near-term stop on a pullback just under the $440 level, depending on your risk tolerance.

Broadcom (AVGO)

Broadcom (AVGO) is anything but boring. It’s the third biggest weight in the VanEck Vectors Semiconductor ETF (SMH), fourth in the Technology Select Sector SPDR ETF (XLK) and eighth in S&P 500. It’s one of the biggest stocks in a sector that has been struggling. And yet, when you look at it technically, it’s a top name with great relative strength.

Fundamentally, AVGO had a great quarterly result. AI chip revenue was up 220% y-o-y to $12.2 billion. The $69 billion acquisition of VMWare (end of 2023) is starting to pay dividends, as it helped expand its software business now that it has a full year under its belt. Like most semiconductor stocks, it hasn’t recovered since the DeepSeek news.

FIGURE 3. DAILY CHART OF BROADCOM STOCK. AVGO has retraced to its 200-day simple moving average and looks like a good risk/reward setup.

Yet technically, shares have retraced back to the rising 200-day simple moving average (SMA) and held. That level also coincides with the gap from which it broke above. Thus, the former major resistance area now becomes support. This gives investors a good risk/reward set-up, using the recent lows just below $177 as a near-term stop.

We can also see a bullish crossover in the Moving Average Convergence/Divergence (MACD), which signaled a buy signal last week. Between solid support holding, good technical relative strength, and a MACD buy signal, shares could run back to $215. That target would reach its declining 50-day moving average. If we see momentum come back into the sector, this should lead the rally.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

We wrote about the American Association of Individual Investors (AAII) poll results a few weeks ago. Since then the bearish activity on the chart has broken a record for the poll. Since the poll’s inception in 1987 we have never seen four weeks in a row of bearish readings above 55%. We are now at bearish extremes for this indicator.

Remember that sentiment, which this poll measures, is contrarian. This means that when market participants are extraordinarily bearish it is a bullish indication. The opposite also applies, extraordinarily bullish readings are bearish for the market.

Clearly you can see that even after and during the bear market in 2022 we never saw a cluster of readings this high. This has put the bull/bear ratio at a very low reading. This has typically resulted in an upside reversal.

One thing we would say is that sometimes poll takers are RIGHT! So while we do see extremely bearish readings, we wouldn’t bet the house that this isn’t a bear market. At DecisionPoint.com we have been monitoring our indicators and participation and we are considering that we are in the throws of a bear market rally and that it isn’t likely to stick around. However, charts like this do have us wondering if the correction is all we’ll get.

Conclusion: Sentiment is extremely bearish on AII and typically this will lead to a sustained rally. However, we have to understand that sometimes the respondents are correct and we’ll see more downside after all.

The DP Alert: Your First Stop to a Great Trade!

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Technical Analysis is a windsock, not a crystal ball. –Carl Swenlin

(c) Copyright 2025 DecisionPoint.com

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.

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Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking

Bear Market Rules

The Zweig Breadth Thrust is best known for its bullish reversal signals, which capture a material increase in upside participation. There is, however, more to the indicator because traders can also use the “setup” period to identify oversold conditions. This report will explain the original Zweig Breadth Thrust and show how these signals work.

Note that our breadth models turned bearish in mid March and the major index ETFs triggered long-term downtrend signals. I am now watching for something that would prove this stance otherwise, such as a Zweig Breadth Thrust. A set up is in the making using S&P 500 data, but this has yet to translate into a signal. We will follow this setup closely in the coming days. Click here for a trial and full access to our reports and videos.

A Sharp Increase in Advancing Stocks 

The Zweig Breadth Thrust (ZBT) indicator uses NYSE advance-decline data to identify major shifts in the percentage of advancing stocks (breadth). The first step is to calculate the percentage of advancing stocks (advances divided by advances plus declines). Second, apply a 10-day EMA. Thus, the indicator is the 10-day EMA of Advances/(Advances + Declines). This formula comes from Greg Morris’ book, the Encyclopedia of Breadth Indicators.

A value of .40 means the 10-day EMA is just 40%, which shows an extremely low percentage of advancing stocks. A value of .615 means the 10-day EMA is 61.5%, which shows an exceptionally large percentage of advancing stocks. For reference, the chart below shows NYSE Advances and Declines in the middle window and the ZBT indicator in the lower window.

From Setup to Signal

The Zweig Breadth Thrust triggers when the indicator moves from an extremely low level to an exceptionally high level in a short period. Such moves show a major turnaround in participation (advancing stocks). A setup occurs when the indicator dips below .40 (40%), and the Zweig Breadth Thrust signals when the indicator surges above .615 (61.5%) within 10 days.

The chart above shows the ZBT indicator (!BINYBT) in the top window, the digital signal in the middle window (!BINYBTD) and the NY Composite in the lower window. The blue shadings show the indicator surging from below .40 to above .615 within a 10 day window (April and November 2023). The pink shadings show two signals that missed the 10 day cutoff.

This indicator can also identify short-term oversold conditions with a move below .40 (40%). The gray vertical lines show four instances when this indicator became oversold (March, August, September and October 2023, April and December 2024). Short-term oversold conditions reflect an extreme pullback that can lead to a bounce.

Solid Rationale, but Something Missing

There is a solid rationale behind the Zweig Breadth Thrust, but something is missing. Those “somethings” are Nasdaq stocks. I suspect Zweig used NYSE breadth because he developed it when the big board (NYSE) dominated trading (80s). The Nasdaq is now a major exchange so a modern breadth indicator should include Nasdaq stocks. I would suggest using S&P 500 or S&P 1500 stocks. Nasdaq stocks account for around 30% of the S&P 500, which is the most important benchmark and where institutions are active. Nasdaq stocks account for around 33% of the S&P 1500, a broad index that covers large-caps, mid-caps and small-caps.

The NYSE ZBT Indicator did not move below .40 in mid March, but versions using the S&P 1500 and S&P 1500 did on March 13th. This means two things. First, the S&P 500 and S&P 1500 became oversold and ripe for a bounce. Second, a possible Zweig Breadth Thrust is setting up with March 27th as the cut off date.

The full version of this report is reversed for subscribers. We show how to set up the ZBT indicator using S&P 500 and S&P 1500 breadth, review past signals and analyze the current situation. This report includes custom SharpCharts with links and a video for deeper understanding. Click here to subscribe and gain immediate access. 

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After reaching an all-time around $540 in mid-February, the Nasdaq 100 ETF (QQQ) dropped almost 14% to make a new swing low around $467.  With the S&P 500 and Nasdaq bouncing nicely this week, investors are struggling to differentiate between a bearish dead-cat bounce and a bullish full recovery.  

There was no question that valuations had become incredibly rich going into the end of 2024, so some sort of corrective move was widely anticipated in Q1 2025.  But was the February to March drawdown enough to appease the valuation trolls and empower investors to buy weakness to drive prices to further all-time highs?

Today, we’ll lay out four potential outcomes for the Nasdaq 100 ETF (QQQ).  As I share each of these four future paths, I’ll describe the market conditions that would likely be involved, and I’ll also share my estimated probability for each scenario.  The goal of this example of “probabilistic analysis” is to expand our thinking of what’s possible, to break down our preconceived market biases, and to open our minds to alternative points of view.

Before we do so, I’d love to revisit the last time we conducted this exercise on the Nasdaq 100 back in December 2024.  

Going into early January it appeared that Scenario 4, the Super Bearish scenario, was matching very closely with market action.  But a very choppy month of January kept prices fairly stable, and by the end of January the Nasdaq 100 was very close to the end of our Scenario 3.

Back to the current market environment, we’re thinking a Very Bullish Scenario would mean the QQQ continues the current uptrend which eventually becomes a full recovery to retest the February 2025 high.  On the other hand, if this week is really more of a dead cat bounce, then the Super Bearish Scenario could take us all the way down to retest the August 2024 lows.

And remember, the point of this exercise is threefold:

1. Consider all four potential future paths for the index, think about what would cause each scenario to unfold in terms of the macro drivers, and review what signals/patterns/indicators would confirm the scenario.
2. Decide which scenario you feel is most likely, and why you think that’s the case. Don’t forget to drop me a comment and let me know your vote!
3. Think about how each of the four scenarios would impact your current portfolio. How would you manage risk in each case? How and when would you take action to adapt to this new reality?

Let’s start with the most optimistic scenario, involving the QQQ continuing this week’s rally to retest the recent all-time high.

Scenario 1: The Very Bullish Scenario

I’ve heard plenty of calls that last week’s low was actually “the” low and the bottom is now in.  But for the Nasdaq 100 to get all the way back up to $540 then we would need to see a dramatic recovery in the Mag 7 names.  Without a rally from the mega cap growth trade, I don’t think it’s even possible for this sort of bull phase to play out.  Given the continued weakness in charts like META, I’d say this is a low probability.

Dave’s Vote: 5%

Scenario 2: The Mildly Bullish Scenario

What if we do see a recovery in most sectors and themes outside the Mag 7 stocks?  Scenario 2 would mean the QQQ can only get up to around $200, because without the biggest growth names participating the uptrend has limited momentum.  Breadth conditions would definitely improve in this scenario, as stocks thrive on a decent Q1 earnings season.

Dave’s vote: 20%

Scenario 3: The Mildly Bearish Scenario

The two bearish scenarios would mean that the recent upswing starts to turn lower as renewed fears of inflation, geopolitical risk, and a weak earnings season all weigh on risk assets.  A mildly bearish scenario means perhaps that we see some signs of optimism as investors begin to feel more familiar with the flurry of policy decisions from Washington.  And even though we haven’t gained much ground by the end of April, it definitely feels as if the bear phase is limited.

Dave’s vote: 30%

Scenario 4: The Super Bearish Scenario

What if the flurry of policy decisions we’ve seen is just an appetizer, and the main course arrives in April?  Given the global instability and economic concerns, it’s not hard to envision a scenario where the February to March drop was the first in a multi-wave decline that takes the QQQ back down to the August 2024 lows.  This scenario seems like the most likely outcome based on the breadth and momentum deteriorations we’ve been tracking for months on our daily market recap show.  

Dave’s vote: 45%

What probabilities would you assign to each of these four scenarios?  Check out the video below, and then drop a comment with which scenario you select and why!

RR#6,

Dave

PS- Ready to upgrade your investment process?  Check out my free behavioral investing course!

David Keller, CMT

Chief Market Strategist

StockCharts.com

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice.  The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  

The author does not have a position in mentioned securities at the time of publication.    Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

You already know about diversification. You’ve set your investment goals, picked a benchmark, and decided on the weighting of your allocations. Now, it’s come down to selecting the assets—stocks or ETFs—to build your portfolio.

As a long-term investor with moderate risk tolerance, how might you build a portfolio to withstand market drawdowns and weather the business cycle?

There are many ways to do this. Here are a few ideas to consider.

S&P Sectors: How Are They Performing and Where Are They Going?

FIGURE 1. RRG CHARTS OF S&P SECTOR ETFS RELATIVE TO THE S&P 500. This image shows you the one-year progression of each sector, indicating the stage of leadership they might be headed.

If you’re looking to diversify by sector, it helps to know where each one has been, performance-wise, and toward what state of leadership they might be entering. Which stocks are Improving, Leading, Weakening, and Lagging?

This is where RRG Charts (specifically RRG S&P 500 Sector ETFs) come in handy. By giving you a dynamic view of sector movement over time, RRGs can help you time your entries to match your strategy—whether you want to buy strength or take a more contrarian approach and buy weakness.

You might also want to view sectors in terms of relative performance. PerfCharts are a useful way to see how each sector is performing against other sectors.

FIGURE 2. PERFCHARTS OF 11 S&P SECTORS. Sectors are sorted from outperforming (left) to underperforming (right).

PerfCharts show that over the past year, Utilities, Financials, and Communications Services have led the market, while Materials, Technology, and Health Care have lagged. If you were looking to shift your portfolio toward greater sector diversification, this chart would prompt a few questions:

• Should you be overweight, underweight, or equal weight in your exposure to certain sectors?
• Do you think the outperforming sectors will retain their leadership levels over the coming quarters, or are they overvalued?
• Are the laggards undervalued, or might there be further downside in the long-term?

Combining RRG and PerfCharts can provide plenty of context for evaluating whether to enter, exit, or rebalance your positions.

From Sector to Industry to Individual Stocks

One question that’ll likely be on your mind is whether you should invest in individual stocks within a given sector or in a sector index ETF.

If you click the sector names in the Sector Summary tool, you can zoom in on the industries. Select the industry and you’ll get a list of all the stocks within that industry. The charts above tell you how the sectors are performing relative to one another.

If you decide to buy stocks for your sector allocation instead of sector ETFs, then you might want to know how a given stock is performing relative to its a) sector, b) industry, and c) a broader market benchmark like the S&P 500.

Here’s an example. Suppose you decide you want to invest in a stock in the Consumer Staples sector. You decide on Sprouts Farmers Market (SFM) which has a high StockChartsTechnicalRank (SCTR) score. Take a look at this daily chart.

FIGURE 3. DAILY CHART OF SFM. You want to see how SFM is performing against its sector, industry, along with the broader market.

Here are a few key points to note. Based on a one-year view…

• The Consumer Staples sector (XLP) is underperforming its peers and the S&P 500 by around 4% (as shown in the PerfCharts example above).
• However, SFM is outperforming its sector (XLP) by over 118%, its industry Food Retailers & Wholesalers ($DJUSFD) by over 104%, and the S&P 500 ($SPX) by over 107%.

If you’re seeking Consumer Staples exposure, should you invest in XLP for a potential turnaround or in SFM, a sector leader with strong momentum?

This is an example of only one way to employ a diversification strategy. You can diversify among stocks vs. bonds, growth vs. value stocks, or emerging vs. developed markets, and many more.

What About Rebalancing?

Market shifts can misalign your portfolio with your strategy, making periodic rebalancing essential for maintaining diversification.

Remember that diversification isn’t about managing and not eliminating risk. You might consider hedging strategies like options or alternative asset exposure like gold, commodities, or crypto during longer downturns. How often should you rebalance? It depends—some do it on a set schedule (every six months or a year), others adjust when allocations drift too far, or after major market events shake things up.

At the Close

Building a diversified portfolio takes a lot of planning, but it doesn’t have to be overly complicated. StockCharts gives you several tools to analyze, select, and build your portfolio. Use the tools to your advantage, and remember to stay flexible, as market conditions perpetually change, prompting you to rebalance from time to time.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

In this exclusive StockCharts video, Joe breaks down a new SPX correction signal using the monthly Directional Lines (DI), showing why this pullback could take time to play out. He explains how DI lines influence the ADX slope and how this impacts shorter-term patterns. Joe also reveals a strong area in the commodity market defying the correction and highlights top stocks within that sector. Plus, he analyzes QQQ and IWM, covering their recent weakness and key resistance levels, before analyzing viewer symbol requests for the week, including ADMA, CSCO, and more.

This video was originally published on March 19, 2025. Click this link to watch on Joe’s dedicated page.

Archived videos from Joe are available at this link. Send symbol requests to stocktalk@stockcharts.com; you can also submit a request in the comments section below the video on YouTube. Symbol Requests can be sent in throughout the week prior to the next show.

Tuesday’s stock market action marked a reversal in investor sentiment, with the broader indexes closing lower. The S&P 500 ($SPX), Nasdaq Composite ($COMPQ), and Dow Jones Industrial Average ($INDU) are still below their 200-day simple moving average (SMA). Investor anxiety is elevated ahead of the Fed’s culmination of its two-day policy meeting. The risk-off sentiment is back, with gold and silver prices rallying. But it may not all be due to the risk-off mode, as lower US Treasury yields and the lower US dollar may have also played a role in the precious metal rally. The SPDR Gold Shares (GLD) hit a new all-time high and silver prices are on the rise.

Technology and consumer discretionary were Tuesday’s worst-performing sectors, while Energy and Health Care took the lead but rose modestly. Overall, it was a pretty red day for U.S. equities (see the StockCharts MarketCarpet below).

FIGURE 1. A SEA OF RED. Tuesday’s StockCharts MarketCarpet was a sea of red with specks of green in the Energy and Health Care, Real Estate, Materials, and Industrials sectors.Image source: StockCharts.com. For educational purposes.

The Mag 7 Unwind

The mega-cap, Mag 7 stocks stand out strongly in Tuesday’s MarketCarpet. The daily chart of the Roundhill Big Tech ETF (MAGS) below shows how these stocks are in a steep fall. The ETF fell below its 50-day SMA and struggled to retain its position above it. The fall from the 50-day to the 200-day SMA was like an elevator ride down. MAGS managed to find a little resistance at its 200-day SMA, but that was short-lived. 

FIGURE 2. ROUNDHILL BIG TECH ETF (MAGS) SLIDES BELOW 200-DAY MOVING AVERAGE. After sliding below its 50-day SMA, MAGS fell hard and continued sliding as it broke below the 200-day SMA.Chart source: StockCharts.com. For educational purposes.

The rise in volume after MAGS fell below its 200-day SMA suggests there’s a lot more selling than buying. The relative strength index (RSI) is hovering above 30, which implies it isn’t oversold yet. So there’s a chance MAGS could fall lower, although it could reverse before dipping into oversold territory.

International Markets

Meanwhile, the iShares China Large-Cap ETF (FXI), iShares MSCI Germany (EWG), iShares MSCI Italy ETF (EWI), and other European stock ETFs are rising. The daily chart of the iShares MSCI EAFE ETF (EFA), which has its top 10 holdings in European companies, is hitting all-time highs (see below).

FIGURE 3. DAILY CHART OF ISHARES MSCI EAFE ETF. European stocks have been rising since early 2025. The 50-day SMA has crossed above the 200-day and price is well above the 50-day SMA.Chart source: StockCharts.com. For educational purposes.

With elevated tariff uncertainty, a slowdown in the U.S. economy, and declining U.S. consumer confidence, it shouldn’t be surprising to see investors diversifying their holdings across different asset groups. This reiterates the importance of having a diversified portfolio spread across different sectors, precious metals, international stocks, and bonds. 

The Closing Bell

Tuesday’s reversal after a two-day winning streak suggests investor uncertainty remains prominent. The Federal Reserve policy meeting ends on Wednesday. Chairman Powell’s press conference is the main event to listen to on Wednesday, but really, any headline could rock the markets in either direction. The best you can do is stay diversified.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Last week, tariff talks, recession fears, and waning consumer sentiment sent stocks lower. This week, the narrative may have shifted, as investors prepare for a macro-filled week and NVIDIA’s annual GTC developers’ conference.

Retail sales data for February came in slightly lower than expectations but better than January’s number. This, along with Treasury Secretary Scott Bessant’s comments about the necessity of the economy undergoing a detox period, may have eased investor worries. All broader equity indexes closed higher on Monday, marking two solid up days in a row.

Next up, we have home prices and new home sales, an important measure of consumer health. The SPDR S&P Homebuilders ETF (XHB) went through a steep downturn as did the SPDR S&P Retail ETF (XRT). Consumer spending is a major contributor to GDP growth which is why these two charts should be on every inverter’s radar. While both ETFs saw an upside swing on Monday, it’s not enough to change the trend (see chart below).

FIGURE 1. SPDR S&P HOMEBUILDERS ETF AND SPDR S&P RETAIL ETF. Both saw a significant slide in value. The upside swing in the last price bar needs to see a lot more momentum and follow through and a confirmed trend reversal. Chart source: StockCharts.com. For educational purposes.

Both ETFs (XHB in the top panel and XRT in the bottom panel) are trading below their 50-day simple moving average (SMA). Monday’s upside move is significant enough to alert investors that perhaps momentum is starting to change. It could be the start of a reversal, a short-term rally that resumes its downtrend, or the beginning of a sideways move. Regardless, it’s worth monitoring the sectors and specific industry groups to get an idea of the general investor sentiment. The StockCharts MarketCarpets can go a long way in giving a big-picture view of the overall market (see below).

FIGURE 2. IT’S MOSTLY A SEA OF GREEN EXCEPT FOR THE HEAVY-WEIGHT LARGE-CAP STOCKS. There was money flowing into the market, especially in the Real Estate, Energy, and Consumer Staples sectors. Image source: StockCharts.com. For educational purposes.

Money flowed into the Real Estate, Energy, and Consumer Staples sectors, but all 11 S&P sectors closed in the green. The weakest performer was Consumer Discretionary—you can thank the slide in Tesla, Inc. (TSLA) and Amazon.com, Inc. (AMZN) for that.

All Ears on Fed

Perhaps the most important macro-event this week will be the FOMC meeting. Although an interest rate cut isn’t expected, there’s still uncertainty surrounding tariffs. When Federal Reserve Chairman Jerome Powell takes the podium on Wednesday, investors will be listening for clues about economic growth and inflation expectations.

Bond prices are showing signs of rising. The iShares 20+ Year Treasury Bond ETF (TLT), which has been trending higher this year, closed modestly higher. Gold and major cryptocurrencies such as Bitcoin and Ether also closed higher.

The Bottom Line

While it’s encouraging to see the stock market show upside momentum after sliding lower for almost a month, take things one day at a time. If you have some cash sitting on the sidelines, be patient and wait for confirming signals of a trend reversal.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Can the Nasdaq 100 rally to all-time highs or break down below key support? In this video, Dave uses probabilistic analysis to explore 4 possible scenarios for the QQQ over the next 6 weeks — from a super bullish surge to a bearish breakdown below the August 2024 low. Discover the key levels, potential market outcomes, and new trading perspectives to stay ahead of the market. Which scenario do you think is most likely?

This video originally premiered on March 17, 2025. Watch on StockCharts’ dedicated David Keller page!

Previously recorded videos from Dave are available at this link.