On Monday, the Dow dropped over 1,000 points after President Trump’s new round of criticism directed at Fed Chair Jerome Powell. The selloff reflects continued volatility driven by geopolitical tensions and uncertainty stemming from the ongoing trade war.

Meanwhile, the price of gold continued climbing to record highs, the U.S. dollar slipped to a three-year low, Bitcoin is working to recover the final 20% from its peak, and the broader market continued its downward slide.

This comparative snapshot on PerfCharts illustrates the bigger picture.

FIGURE 1. PERFCHARTS OF GOLD, DOLLAR INDEX, BITCOIN, AND THE S&P 500.  Safe haven is the name of the game.

When capital rotated out of stocks and Bitcoin, did it retreat to cash or gold? It’s a reasonable question, as cash appears to be circling the drain amid gold’s ascent.

Fear Trade Tailwinds

So, what’s going on, particularly with gold prices? Here’s a general snapshot:

• The U.S. dollar index drop signals a loss of global confidence in the currency.
• The possibility of Trump removing Powell raises fears about the Federal Reserve’s independence, especially as inflation concerns mount due to rising tariffs.
• Fed Chair Powell indicated that rate hikes, not cuts, may be needed to control inflation.
• Global trade tensions are intensifying, with China slashing U.S. oil imports and pivoting to other countries.
• As the price of gold has broken through major resistance levels, SPDR Gold Shares (GLD) just crossed $100 billion in assets under management for the first time.

One More Thing: The Mar-a-Lago Accord

The so-called “Mar-a-Lago Accord” is an idea tied to Trump’s economic team that would pressure U.S. allies to accept a weaker dollar and lower returns on U.S. debt in exchange for military protection.

If it happens, the dollar would devalue further, making U.S. exports more competitive. Imports would become more expensive, though. A weaker dollar may continue to boost gold and Bitcoin, both viewed as safe havens. As for the S&P 500, some companies, especially exporters, might benefit, but concerns about inflation or trade conflicts could drag the market down even further.

Gold at $4,000 by 2026

While several analysts, such as those at UBS, have set a $3,500 price target for gold, the Goldman Sachs Group forecasts gold at $4,000 by 2026.

Let’s take a look at where gold is now. Take a look at this daily chart.

FIGURE 2. DAILY CHART OF GOLD. With gold at all-time highs, the pullback could bounce at one of these support levels.

While gold’s Relative Strength Index (RSI) reading is registering as “overbought,” you’ll have to wait and see if the current dip develops into a pullback. If it does, the key market highs and lows highlighted by the Price Channels (extended by the magenta dotted lines) are likely to serve as support. I also overlaid the Ichimoku Cloud to provide a wider projected support range into the near future.

If you’re bullish on gold and expecting to reach the $3,500 to $4,000 range as forecasted by analysts, you can use these support levels as favorable entry points. The $2,956 level is especially important; it marks a key swing low, and a close below it could call gold’s uptrend into question.

As for “Digital Gold” (Bitcoin)…

The other safe haven asset, as some would call it (emphasis on “some”), is Bitcoin ($BTCUSD). Let’s take a look at its current price action by zooming in on this daily chart.

FIGURE 3. DAILY CHART OF BITCOIN ($BTCUSD). It’s at a juncture point, currently testing resistance at $88,505.

Looking at the price channels, you can see how Bitcoin has been making consecutive lower lows over the last three months. It has also been making lower highs until March, where the high of $88,505 was tested three times, and that is where the digital asset is currently trading.

The Ichimoku Cloud range and the blue-shaded area highlight this resistance level. If the market decides on Bitcoin as a reliable safe haven, you will see its price break above this resistance level and challenge the next resistance level at $100K before challenging its all-time high at around $109K. Currently, its RSI reading is lifting above 50 and rising, indicating that the crypto has room to run before approaching any range that may be considered overbought.

What About the Dollar?

The weekly chart of the US Dollar Index ($USD) below highlights the key support level the dollar has just broken below.

FIGURE 4. WEEKLY CHART OF THE U.S. DOLLAR. Near-term support is near, but will it hold?

The US Dollar Index is at a three-year low, with support at $97 and $95. The RSI also indicates that the dollar is entering oversold levels. But these technical levels might not mean much considering the alleged intentional devaluation of the dollar. This trend appears to be guided more by political strategy than market fundamentals.

Meanwhile, the fear trade into safe-haven assets is likely to intensify until monetary policy and the current geopolitical chess moves generate a clearer sense of direction and stability.

At the Close

As far as gold’s rise, sentiment is doing the heavy lifting right now, but it’s rooted in legitimate fundamental risks. If those risks persist or worsen, fundamentals may eventually validate even higher price levels. Hence, the Goldman projection of $4,000 an ounce. If you’re looking to enter gold or Bitcoin, I’ve laid out the key support levels for gold and potential headwinds for Bitcoin.

Watch those price levels closely, and stay tuned to the latest geopolitical developments.

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.

Tesla Inc. (TSLA)

Tesla, Inc. (TSLA) remains one of the world’s most volatile and discussed stocks, with Elon Musk’s political bent having made it a lightning rod of discussion. Sales continue to fall – especially in Europe – and Musk’s personal focus seems to be on many other areas. It will be interesting to see how the numbers look and what if any guidance may be given when Tesla reports on Tuesday afternoon.

Technically, shares have made a full reversal since their post-election rally and now sit poised to move again. This is not an ideal-looking chart for the bulls, as key levels of support have been breached, the near-term trend is lower, and the long-term trend is a volatile mess.

FIGURE 1. DAILY CHART OF TESLA STOCK PRICE.

Currently, there’s a descending triangle in a near-term downtrend, with a floor around $215. It has been tested twice and held, but each rally continues to be met with strong resistance. There is more overhead resistance and work to be done to get shares on the right ascending track.

During a rally, there are three levels where sellers should take charge. The first level coincides with the current triangular downtrend line and old support, now resistance, which goes back to its pre-election breakout around $270. Then there is also the 200-day moving average just over $290. Lastly, there is the downtrend from the recent highs at the $300 level.

Momentum favors the bears on any rally, and weakness could plunge the stock towards its August 2024 lows around $180. It is not an ideal risk/reward set-up going into the numbers. Both key momentum indicators — relative strength index (RSI) and moving average convergence/divergence (MACD) — appear to be stalling, which makes this stock one to avoid despite all the news it may cause later this week.

Service Now (NOW)

ServiceNow, Inc. (NOW) shares have been decimated since reporting earnings last January. The software company, the fourth-largest company in the iShares Tech-Software ETF (IGV), looks to rebound when it reports earnings after the close on April 23.

Technically, recent price action is showing signs of a bottom, and the risk/reward set-up is getting clear.

FIGURE 2. DAILY CHART OF SERVICE NOW.

The sell-off reached a crescendo after “Liberation Day” and snapped back to levels that set up a plan of attack as we go into this week’s earnings. Shares reached extreme oversold conditions on both the MACD and RSI readings before hitting recent lows. Price action on the biggest move lower showed a divergence in both indicators, and didn’t confirm that last move down.

There are two bullish divergences after a severe drawdown, which is a positive. The Fibonacci retracement levels from the beginning of the bull market to its recent peak also show a positive development. The sell-off found support right at the 61.8% “golden ratio” level, which coincided with prior support going back to the lows of 2024.

Momentum is turning, a floor seems to be apparent, and we have something to reverse – all good signs for a bull case. While the moves are rather wide, targets to the downside look to be set just above $675.

To the upside, a simple mean reversion takes shares back to their declining 50-day moving average just above $865. If it breaks above there, watch for a test of the 200-day moving average, which is another $60 higher.

If you were to believe that a solid number is coming on Wednesday afternoon, as it has in all but one quarter going back to 2018 (last quarter they missed), then it may be a good entry point to capture the upside. However, as it sits in the middle of a range, it’s more of a coin flip here. Currently, it looks as though we have a sell-off that should be bought and a rally that should be faded.

One thing we do know is that it will be interesting to see if the stock can try to recapture its longer-term uptrend in a rather tricky tape.

Alphabet, Inc. (GOOGL)

Alphabet (GOOGL) continues to make headlines as it deals with ongoing litigation in Washington and competition from search engines like ChatGPT. Shares have been under pressure all year and are at a fork in the road coming into their Thursday numbers.

FIGURE 3. WEEKLY CHART OF GOOGL STOCK.

We kept this weekly chart as simple as possible to show this “fork-in-the-road” scenario. At the end of 2024, the chart completed a beautiful saucer bottom pattern and broke out. It almost achieved its upside targets around $220, but fell just short.

Then it broke down.

After its initial breakout, GOOGL rallied and paused. Price faded back to test old resistance after its initial leg higher. That level of old resistance became support, in textbook fashion. Shares rallied from there to make new all-time highs; then, they failed again.

Now, GOOGL sits at a key level that was tested once last week and held. Shares never closed below the key support area around $150. That sets traders up with a risk/reward scenario that seems favorable, for now. Anyone buying the stock here has two levels from which to cut their losses if price were to break down from here.

Watch the recent intraday lows at $140.50 and then the rising 200-week moving average at $136. If it closes below there, you should exit the stock and wait for a better entry point. 

To the upside, there is smooth sailing to the 50-week moving average just above $172. It may take a strong beat and guide in this macro environment to push much higher, but the lines are set as we head into this busy week of earnings. 

In this video, market sentiment, investor psychology, and stock market trends take center stage as David Keller, CMT, shares three powerful sentiment indicators that he tracks every week. He explains how the values are derived, what the current readings say about the market environment in April 2025, and how these levels compare to past bull markets and bear markets. If you’re looking for a sentiment playbook to navigate these markets, this analysis will give you the edge.

This video originally premiered on April 21, 2025. Watch on StockCharts’ dedicated David Keller page!

Previously recorded videos from Dave are available at this link.

The market continued to slide lower today as the bear market continues to put downside pressure on stocks in general. Bonds and Yields are at an inflection point as more buyers enter the Bond market which is driving treasury yields higher. What is the long-term outlook for Bonds? Carl gives you his thoughts.

First, Carl covered the market as a whole before discussing his long-term outlook for Bonds and Yields. Not only did he cover the SPY and its indicators, he looked at the rally in Bitcoin and the vertical rally for Gold among others. Crude Oil is pulling back again and the Dollar continues to lose strength.

After covering the market, he discusses his thoughts on Bonds. This was followed by questions.

Erin jumped in to cover sector rotation. There are clear problems and clear strength visible among the sectors, but ultimately all are struggling including defensive sectors Utilities and Real Estate. She zeroed in on the Energy sector and Consumer Staples sector “under the hood”.

Finally the pair finished by taking viewer symbol requests.

01:01 DP Signal Tables

05:03 Market Overview

13:28 Bond Discussion

17:08 Magnificent Seven

22:56 Questions

30:07 Sector Rotation

40:04 Symbol Requests

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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.

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Bear Market Rules

In this video, as earnings season heats up, Mary Ellen reviews current stock market trends, highlighting top-performing stocks during past bear markets that are showing strength again today. She also shares a proven market timing system that’s signaled every stock market bottom, helping investors stay ahead of major turning points.

This video originally premiered April 18, 2025. You can watch it on our dedicated page for Mary Ellen’s videos.

New videos from Mary Ellen premiere weekly on Fridays. You can view all previously recorded episodes at this link.

If you’re looking for stocks to invest in, be sure to check out the MEM Edge Report! This report gives you detailed information on the top sectors, industries and stocks so you can make informed investment decisions.

Top 5 Remains Unchanged

The latest sector rotation analysis reveals a market that’s still playing defense. Despite some minor shuffling in the lower ranks, the top five sectors remain unchanged this week—a sign that the current defensive positioning is settling into a more stable pattern.

Consumer staples holds its ground at the number one spot, followed by utilities, financials, communication services, and health care. This lineup underscores the market’s continued preference for defensive plays.

1. (1) Consumer Staples – (XLP)
2. (2) Utilities – (XLU)
3. (3) Financials – (XLF)
4. (4) Communication Services – (XLC)
5. (5) Healthcare – (XLV)
6. (6) Real-Estate – (XLRE)
7. (8) Industrials – (XLI)*
8. (9) Consumer Discretionary – (XLY)*
9. (10) Materials – (XLB)*
10. (7) Energy – (XLE)*
11. (11) Technology – (XLK)

Weekly RRG

The weekly Relative Rotation Graph (RRG) paints a clear picture of the defensive sectors’ strength. Consumer staples and utilities are continuing to move further into the leading quadrant, solidifying their dominant positions. Healthcare, while ranked fifth, is located within the leading quadrant but has lost some relative momentum over the past two weeks — something to keep an eye on.

Interestingly, financials and communication services, ranked third and fourth, respectively, are showing signs of momentum loss despite maintaining elevated RS ratio levels. Communication services have actually crossed into the weakening quadrant this week. At current RS-Ratio levels, this is not too concerning yet.

Daily RRG: Staples and Utilities Slightly Losing Relative Momentum

Zooming in on the daily RRG provides some nuanced insights. Staples and utilities, while still disconnected from other sectors at high RS ratio levels, have lost some relative momentum in the last week. Utilities have dipped into the weakening quadrant on this timeframe, but given its high relative strength (RS) ratio, it’s not a major concern, at least not yet.

Financials and health care are also in the weakening quadrant on the daily RRG, but they’re flirting with the 100 level on the RS ratio scale. We haven’t seen a crossover yet, but it’s definitely a situation to be aware of.

One bright spot: communication services, despite being in the lagging quadrant, is showing signs of rolling back up. This aligns with its positive heading on the weekly RRG, suggesting potential improvement ahead.

Consumer Staples (XLP)

XLP is flexing its muscles, pushing against overhead resistance—a show of strength given the S&P 500’s weakness. A break above the 83 area could unlock more upside potential, further cementing Staples’ defensive appeal. The relative strength line is attempting to break above horizontal resistance, dragging both RRG lines higher and pushing XLP deeper into the leading quadrant.

Utilities (XLU)

Utilities are showing a similar pattern to staples, though not quite as robust. XLU has retreated into its trading range, between roughly 73 and 80, currently sitting in the mid-range. Given the broader market weakness, this is still a positive setup for utilities. The sector is attempting to break above its relative resistance, which is propelling the RRG lines above 100 and deeper into the leading quadrant.

Financials (XLF)

Financials took a hit but found support around 42, bouncing strongly back towards the 47-47.50 resistance area. This sets up a limited upside potential, but the downside seems well-protected for now. The raw relative strength uptrend remains intact, keeping XLF in the leading quadrant despite some leveling off of the RRG lines.

Communication Services (XLC)

XLC has been the biggest loser among the top sectors, breaking support around 95 and declining rapidly to support near 82.50. We’re currently seeing a bounce off that support. Relative strength is maintaining its rising channel, keeping the RS ratio well above 100. However, the momentum line has dipped below 100, temporarily pushing XLC into the weakening quadrant. The uptrend in relative strength is still in play, though — something to watch closely.

Health Care (XLV)

Healthcare is struggling, grappling with support between $ 132.50 and $ 135. A potential head and shoulders top formation is developing — a pattern we’re seeing in several sectors, to be honest. XLV is clearly the weakest of the top five, explaining its fifth-place ranking. Relative strength is struggling to maintain its upward trajectory. While both RRG lines remain above 100, we need to see a clear break in relative strength and the formation of an uptrend for healthcare to maintain its top-five status.

RRG Portfolio Performance

An update on our RRG portfolio of top five sectors: As of Friday’s close, the portfolio is down 10.2% year-to-date, compared to the S&P 500’s (using SPY as the benchmark) decline of 9.96%. This results in a slight underperformance of 0.2%. However, it’s worth noting that we’re catching up to the benchmark after last week’s more significant underperformance — we’re on the rise again.

#StayAlert –Julius

Trading is all about the odds. Trade when the odds are in your favor. Exercise patience and stand aside when the odds are NOT in your favor. Stocks are in a bear market with the vast majority of names (76%) trading below their 200-day SMAs. Clearly, the odds are NOT in our favor for equities and equity ETFs. Traders need to look elsewhere. Today’s report will highlight some non-equity leaders and analyze Bitcoin as it sets up.

TrendInvestorPro works with a ChartList that has 72 ETFs covering all sectors, the key industry groups, commodities, bonds and crypto. Note that this curated ChartList is available to TrendInvestorPro subscribers. The image below is sorted by the percentage above the 200-day SMA (blue shading) to show the top 20 performers. This simple performance overview reveals a lot. We are NOT in a bull market and alternative assets are attracting attention (gold, Bitcoin).

First, we see leadership from gold, silver, Bitcoin, and commodity-related ETFs. Second, only a handful of equity ETFs are trading above their 200-day SMAs. Third, these ETFs represent defensive groups (Consumer Staples Utilities, MLPs, Aerospace & Defense, Insurance). This is NOT the performance profile for a bull market. We are in a bear market and equities are not the place to be right now.

Improve your odds and stay on the right side of the market with the models and analysis at TrendInvestorPro. Our stock market model turned bearish in mid March, and remains bearish. Even with the big surge on April 9th, our thrust indicators fell well short of a signal because of weak follow through. We will continue to watch these models and focus on equity alternatives. Click here to get a bonus and learn more!  

The Bitcoin ETF (IBIT) is in the leadership group and Bitcoin ($BTCUSD) is bouncing off its 270 day SMA. Where did 270 come from? A typical 200-day SMA covers a little less than 9 months of trading days, which exclude weekends and holidays. Bitcoin trades 24/7, weekends and holidays. Chartists, therefore, need an adjustment to get the ~9-month equivalent for Bitcoin. I chose 270.

The chart below shows Bitcoin ($BTCUSD) with a classic correction and setup in the making. Bitcoin gained over 100% from September to January and was entitled to a correction. Dow Theory teaches us that normal corrections retrace 33 to 67 percent of the prior advance. 50 percent is the base case. The chart shows the Fibonacci retracements with Bitcoin retracing 61.8% as it fell to 75000. Bitcoin also tested the rising 270-day SMA in March and April. A 61.8% retracement and return to the ~9-month SMA are normal for corrections (blue shading).

A falling wedge formed with Bitcoin establishing resistance at 88000 (pink line). Falling wedge patterns are also typical for corrections. More importantly, these patterns provide levels to watch for a trend reversal. Bitcoin is making its first breakout attempt with a move above the upper trendline. Further strength above 88000 would forge a higher high and argue for a new uptrend. I would then set a re-evaluation level at the 270-day SMA. A close below this moving average would suggest a failed breakout.  

TrendInvestorPro keeps you on the right side.

//////////////////////////////////////////////////

The week that went by was a short trading week with just three trading days. However, the Indian equities continued to surge higher, demonstrating resilience, and the week ended on a positive note. In the week before this one, the Nifty was able to defend the 100-week MA; last week, it surged higher and closed just at the 50-week MA. The trading range got narrower; the Index oscillated in a 665.35-point range. The volatility, too, cooled off; the India Vix declined by 23.08% to 15.47. While staying largely stable with a strong underlying bias, the headline Index closed with a net weekly gain of 1023.10 points (+4.48%).

There are a few technical levels that need to be closely observed. The Nifty resisted the 100-day moving average (DMA) at 23395 before breaking out above that level. Zooming out to the weekly chart, the Nifty has closed at the 50-week MA, currently placed at 23885. This point and the 200-DMA at 24050 create an important resistance zone for the Nifty. While there is room for Nifty to move higher towards the 24000 level, there are strong possibilities of the markets consolidating between the 23900 and 24000 levels. While no major drawdowns are expected, there is a high chance that the upmove may at least take a breather around this level. It is important to watch Nifty’s behavior against this level.

The coming week may start on a stable note; the levels of 24,000 and 24,210 are likely to act as resistance points. The support will come lower at 23500 and then at 23345, which is the 20-week MA.

The weekly RSI is 53.94; it has formed a 14-period high, indicating a bullish trend. The weekly MACD has shown a positive crossover; it is now bullish and trades above its signal line.

The pattern analysis on the weekly chart shows that the Nifty has returned to the important level of the 50-week moving average, which it previously violated when it initiated its corrective move. This level and the 200-DMA placed at a short distance at 24050 are likely to offer resistance. This would mean that the markets are entering a major resistance zone; unless 24050 is taken out on the upside, we can expect the markets to consolidate, showing minor retracements over the coming days.

Overall, it is time for one to focus on protecting the gains at higher levels. While one may continue staying invested on the long side, new purchases must focus on the pockets that have shown the improvement of relative strength at lower levels and show strong signs of reversing their trend. Effective rotation into sectors that show improvement in their relative strength and protecting gains in the pockets that have run up hard would be important. A cautiously positive outlook is advised for the coming week.

Sector Analysis for the coming week

In our look at Relative Rotation Graphs®, we compared various sectors against CNX500 (NIFTY 500 Index), which represents over 95% of the free float market cap of all the stocks listed.

Relative Rotation Graphs (RRG) show the Nifty PSU Bank and Consumption sector Index has rolled inside the leading quadrant. The Commodities, Financial Services, Banknifty, Infrastructure, and Metal Index are also placed inside the leading quadrant. While the Metal Index is showing a weakening of relative momentum, these groups are likely to relatively outperform the broader Nifty 500 index.

There are no sectors inside the weakening quadrant.

The Pharma Sector Index has rolled inside the lagging quadrant. The IT index also continues to languish inside this quadrant, along with the Midcap 100 index. The  Realty and the Media Indices are also inside the lagging quadrant; however, they are seen sharply improving their relative momentum against the broader markets.

The Nifty PSE, Energy, and FMCG Indices are inside the improving quadrant; they are expected to continue improving on their relative performance over the coming week.

Important Note: RRG™ charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.  

Milan Vaishnav, CMT, MSTA

Consulting Technical Analyst

www.EquityResearch.asia | www.ChartWizard.ae

Reflecting on the price action over this shortened holiday week, I’m struck by how the leadership trends have not really changed too much.  We’ve observed bombed out market breadth indicators, and the S&P 500 remains clearly below its 200-day moving average despite a strong upside swing off the early April market low.

But how much as the leadership of this market changed over the last couple weeks?  I would argue that conditions remain fairly consistent over that period, and are still not overwhelmingly bullish.

Defensive Sectors Still Outperforming Offense

Here’s one of my favorite charts for analyzing offense vs. defense, a chart that holds a place of honor on my Market Misbehavior LIVE ChartList.  We’re comparing the Consumer Discretionary and Consumer Staples using both cap-weighted and equal-weighted ETFs.  

When the ratios are going higher, investors are favoring “things you want” over “things you need” which implies optimism for economic growth.  When the ratios slope lower, that suggests more defensive positioning as investors are skeptical of growth prospects.

We can see that the cap-weighted version of this ratio made a peak in January, while the equal-weighted version made its own top in February.  Both ratios have been in a fairly consistent downtrend of lower highs and lower lows, even through last week’s sudden spike on tariff policy changes.

How bullish do I want to be when these ratios are sloping lower?  Generally speaking, I’ve found that until investors start believing in the upside potential of Consumer Discretionary over the relative defense of Consumer Staples, it’s best to remain on the sidelines.

Using the RRG to Visualize Offense vs. Defense

While I often refer to relative strength ratios of sector ETFs vs. the S&P 500 index, I also enjoy leveraging the power of Relative Rotation Graphs (RRG®) to monitor a series of relative strength ratios in one simple but powerful visualization.

Here I’m showing the 11 S&P 500 economic sectors relative to the S&P 500, and I’m highlighting Consumer Discretionary and Consumer Staples to monitor their relative positions.  If you click “Animate” for this visualization, you’ll see that toward the end of 2024, offense was clearly outperforming defense.  The XLY was in the Leading quadrant, the XLP was in the Lagging quadrant, and the rotations suggested a classic bull market configuration.

Fast forward to February and March, and you’ll see how Consumer Discretionary rotated into the Weakening and then Lagging quadrant, while Consumer Staples strengthened during that same period.  At this point, the RRG is telling me defense over offense, in a classic bearish configuration.

Sticking With Groceries, Guns, and Gold

So given the bearish leadership configuration in spite of a sudden bounce of the April market low, where can we find potential opportunities?  I’ll highlight three ideas that I’ll summarize as “Groceries, Guns, and Gold.”

Playing off the “things you need” theme implied above, grocery retailer Kroger Co. (KR) has managed to pound out a fairly consistent pattern of higher highs and higher lows.  With improving momentum and a new 12-month relative high this week, this is a chart continuing in a clear uptrend despite broad market weakness.  By the way, KR was one of the Top Ten Charts for April 2025 I presented with Grayson Roze!

Defense stocks like Northrop Grumman Corp. (NOC) have experienced an upside resurgence given geopolitical instability in 2025.  From a technical perspective, I love how charts like NOC have rallied since mid-February while most stocks as well as our equity benchmarks have been trending lower!  There’s a significant resistance level to overcome around $550, but a confirmed break higher could open the door to further gains.

Gold has experienced an incredible run so far in 2025, finishing the week up 26% for the year compared to the S&P 500’s 10% loss over the same period.  Similar to the chart of NOC, Newmont Corporation (NEM) is addressing a key resistance level from a major high in October 2024.  But so far in 2025, NEM has been scoring higher highs and higher lows, potentially building momentum for a break to a new all-time high.

It can be super tempting to consider the April low as “the bottom” and go all-in on growth stocks and offensive plays.  But given the lack of leadership rotation in April, I’m inclined to stick with charts that remain in strong uptrends during uncertain times.

RR#6,

Dave

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

David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC

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.

It was another erratic week in the stock market. There were several market-moving events sprinkled throughout this short trading week, including earnings, escalation of tariff wars, and Chairman Jerome Powell’s remarks at the Economic Club of Chicago. This extended to wild swings in the bond market as well.

We had several positive earnings from banks and Netflix, Inc. (NFLX). Others, such as UnitedHealth Group, Inc. (UNH), disappointed, sending the Dow Jones Industrial Average ($INDU) lower by 1.33%.

Chairman Powell stated that tariffs could increase inflation. This would cause economic growth to slow down and unemployment to increase. The hope is that inflation is transitory, and, after it becomes stable, the Fed can continue to focus on its dual mandate of maximum employment and price stability.

It’s an insecure time for investors, and many feel the pain. You’re probably wondering how long this pain will go on for. In an uncertain environment, the best you can do is turn to the bond market.

It’s All About Bonds

The recent wild swinging market activity can be encapsulated in the price action of Treasury yields. Since 2024, yields have been swinging up and down. In the past year, the 10-year Treasury yield has ranged from 3.60% to 4.81%, and when the range is this wide, it’s an indication of economic instability. Not to mention, economic instability could result in a weaker economy.

The daily chart of the 10-Year US Treasury Yield Index ($TNX) gives you an idea of the range of yields in the last year. More recently, the yield has risen from 3.89% to 4.59%, and has now pulled back to its 50-day simple moving average (SMA).

FIGURE 1. DAILY CHART OF 10-YEAR TREASURY YIELDS. Yields have been seeing some large up and down swings.Chart source: StockCharts.com. For educational purposes.

Generally, when stock prices fall, bond prices rise. Since bond yields move inversely to bond prices, you’d expect yields to fall. This scenario isn’t playing out. Instead, we’re seeing yields move erratically while bond prices remain suppressed. There needs to be stability in bond yields before a stock market recovery, and one way to do that is to monitor the chart of the Merrill Lynch Option Volatility Estimate, referred to as the MOVE Index ($MOVE).

The MOVE Index tracks bond volatility. Think of it as the bond counterpart to the Cboe Volatility Index ($VIX). The chart below displays the $MOVE/$VIX relationship, with the correlation between the two in the lower panel.

FIGURE 2. THE MOVE INDEX VS. VIX. A high correlation between the MOVE Index and VIX suggests interest rates and stock prices are tightly connected. A lower correlation would indicate stability in equities.Chart source: StockCharts.com. For educational purposes.

The two have been highly correlated since the end of March, which indicates that stocks and interest rates are tightly connected. This means the wild up and down swings in equities could continue. When the two are less correlated, we can expect equities to start settling down. Looking at the above chart, a correlation of 0.80 would be sufficient for signs of stability.

Both $VIX and $MOVE have come back slightly, but their correlation is at 0.93, which is relatively high.

Be sure to save both charts displayed in this article to your ChartLists. They could alert you to stability in the stock market ahead of other indicators.

The Bottom Line

Until stability returns, you could do the following:

• Stay on the sidelines and keep some dry powder.
• Invest in risk-off instruments such as gold and silver.
• Park some of your money in defensive sectors.

Equities could slide lower before stability returns. If this happens, you could pick up some growth stocks for a bargain.

An empowered investor comes out ahead after market instability. So monitor the market closely and, when the time is right, make wise investment decisions.

End-of-Week Wrap-Up

• S&P 500 down 1.50% on the week, at 5282.70, Dow Jones Industrial Average down 2.66% on the week at 39,142.23; Nasdaq Composite down 2.62% on the week at 16,286.45.
• $VIX down 21.06% on the week, closing at 29.65.
• Best performing sector for the week: Energy
• Worst performing sector for the week: Consumer Discretionary
• Top 5 Large Cap SCTR stocks: Palantir Technologies, Inc. (PLTR); Elbit Systems, Ltd. (ESLT); Anglogold Ashanti Ltd. (AU); Just Eat Takeaway.com (JTKWY); Kinross Gold Corp. (KGC)

On the Radar Next Week

• Earnings season continues with Haliburton (HAL), Tesla (TSLA), Boeing Co. (BA), International Business Machines (IBM) and others reporting.
• 30-Year Mortgage Rates
• March New Home Sales and Building Permits
• April S&P PMI
• April Consumer Sentiment
• Fed speeches from Jefferson, Harker, Kashkari, 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 personal and financial situation, or without consulting a financial professional.