On Tuesday, January 7, 2025, CES (Consumer Electronics Show) 2025 opens its doors in Las Vegas for a four-day event. As the world’s largest technology expo, CES is the hub for global tech innovation,  spotlighting the cutting-edge advancements that will define tech trends in the year ahead.

Two key drivers are at the heart of today’s tech focus: semiconductor chips and AI technology. Both present a strong case for investment, and investing in semiconductor companies that enable growth in AI ecosystems is among your strongest bets for profiting from future trends.

That said, you should look at the semiconductor industry to see which companies offer the strongest opportunities. Let’s begin with VanEck Vectors Semiconductor ETF (SMH) as our industry proxy. Below is a weekly chart.

FIGURE 1. WEEKLY CHART OF SMH. Notice how the Accumulation/Distribution Line (ADL) sits above the current price action. Chart source: StockCharts.com. For educational purposes.

Following a two-year uptrend, SMH appears to be caught within a narrow trading range (see magenta box). The two blue dotted lines mark SMH’s highest high ($281.82) and its corresponding swing low ($199.61). The current price gap indicates a bullish attempt to break out of the current range.

The Accumulation/Distribution Line (ADL), a volume-based indicator that tracks the cumulative flow of money into and out of a security, shows a noticeable rise despite the price remaining stuck in this range. This creates a slight bullish divergence, suggesting that SMH is experiencing capital inflows that could eventually push the ETF above its current trading range.

Now that you have a broader perspective on what semiconductor stocks are doing, let’s zoom in on three that are highly involved in AI tech production:

• NVIDIA Corp. (NVDA): The leader in AI chips.
• Advanced Micro Devices, Inc. (AMD): A secondary competitor in AI-focused GPUs and CPUs.
• Taiwan Semiconductor, Mfg. (TSM): A major foundry for AI semiconductors.

NVDA Testing All-Time Highs

NVDA’s daily chart shows that the stock is experiencing a volatile uptrend and is now experiencing a strong bout of selling after approaching its all-time high of $152.88. The question is whether NVDA is topping out or has enough technical momentum to eventually break through this level and continue setting new record highs.

FIGURE 2. DAILY CHART OF NVDA. Is it toppy or might it have enough momentum to break above its all-time high?Chart source: StockCharts.com. For educational purposes.

NVDA’s StockChartsTechnicalRank (SCTR) score, despite occupying the ultra-bullish 90 range for some time, now stands at around 71. Momentum-wise, the MACD (Moving Average Convergence/Divergence) has begun showing green shoots of bullishness, with the MACD line crossing over the signal line and both appearing to ascend above the center line. This indicates that the stock’s short-term momentum is increasing, which suggests the possibility of continued upward movement.

Add NVDA to your ChartList and look to the trendline as a potential support level should the stock dip. It may present a strong buying opportunity.

AMD: Second Runner Up and Far Behind

Take a look at AMD’s weekly chart.

FIGURE 3. WEEKLY CHART OF AMD. As NVDA’s major competitor, AMD’s performance has been frighteningly poor.Chart source: StockCharts.com. For educational purposes.

AMD is supposed to be NVDA’s most direct competitor in AI chip production. If this is the case, can you expect a dramatic turnaround and substantial growth from where AMD is now?

AMD is far underperforming NVDA, down almost -79%. Watch the most recent bounce (see blue arrow) off the support range marked by the blue rectangle. The chart includes an overlay of a ZigZag line. This outlines the trend movement, showing the critical swing points defining an uptrend and downtrend.

Does the current bounce indicate a refusal to break below the most recent swing low? If so, will AMD have enough momentum to break above the last swing high? This is what’s key to monitor: specifically, whether AMD breaks below the swing low or above the swing high. As for now, the trend is still downward.

Add AMD to your ChartLists and, if you’re bullish, wait for a clear sign of reversal using volume-based and momentum indicators, keeping a tight stop on the most recent swing low. Also, you may want to check the SCTR score to see if it is moving dramatically upward.

TSM: The AI Chip Foundry

Last but not least, there’s TSM, the foundry. Take a look at its weekly chart and compare it to that of AMD.

FIGURE 4. WEEKLY CHART OF TSM. There’s a strong uptrend and the stock has reached a record high.Chart source: StockCharts.com. For educational purposes.

This week, TSM is exhibiting an almost ideal uptrend and gapping upwards to “all-time high” territory. But is it bound for another cyclical pullback or does it have enough momentum to drive higher?

Shift over to a daily chart and you might see something problematic.

FIGURE 5. DAILY CHART OF TSM. There’s a clean uptrend, but money flow is lagging.Chart source: StockCharts.com. For educational purposes.

TSM’s uptrend looks pristine (see blue dotted line). But if you look at the ADL, you’ll notice how the cumulative money flows peaked in early 2024. Now it’s showing a bearish divergence, in which TSM has broken into record highs amid a backdrop of dwindling money inflows.

There’s a strong chance of a pullback, and the current bout of selling may be tipping the market’s hand toward this bias. If TSM finds support at the trendline, look for other signs that momentum may be picking up. If it breaks below the trendline, then look for more downside. Hint: There are rumors that NVDA is evaluating Samsung foundry due to TSM’s high costs and limited production capacity. If that transition goes through, it may impact TSM’s bottom line.

Actions to Take Now

So what can you do from here on?

• Add SMH, NVDA, AMD, and TSM to your ChartLists.
• Watch SMH to see if it successfully challenges resistance at $281.82.
• See if NVDA bounces off the trendline and eventually breaks above $152.88, either of which can serve as a buying opportunity.
• Monitor AMD for signs of a reversal on strong momentum before considering a long position.
• Keep an eye on TSM’s trendline for signs of support or further downside in light of weakening money inflows.

And if you’re interested in all the new tech products, follow CES 2025 reports for insights into new tech trends that could impact the semiconductor sector.

At the Close

Semiconductors and AI remain at the forefront of innovation. CES 2025 is likely to reflect this trend among several of its showcased products. As companies race to meet rising demand in this competitive field, staying alert to rapid developments could offer early insights into future-defining investment opportunities.

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 video, Dave shares a long-term analysis of the Ten-Year Treasury Yield, breaks down how the shape of the yield curve has been a great leading indicator of recessionary periods and weaker stock prices, and outlines the chart he’s watching to determine if early 2025 will look a great deal like early 2022.

This video originally premiered on January 6, 2025. Watch on StockCharts’ dedicated David Keller page!

Previously recorded videos from Dave are available at this link.

In today’s free DP Trading Room Carl and Erin discuss whether this market rally can get legs and push the market even higher? Mega-caps are looking very positive with the Magnificent Seven leading the charge. Technology is showing new strength along with Communication Services.

Carl starts the trading room off with his review of the DP Signal Tables. He details the market trend and condition. He discusses through his presentation the possibility of a follow-on rally. He also covers Bitcoin, Yields, Bonds, Gold, the Dollar, Crude Oil among others.

Next up was a review of the Magnificent Seven in the short and intermediate terms. Are they positioned bullishly to continue to push the market higher?

Erin jumps in with a complete review of sector rotation. Takes a deep dive into the Semiconductor industry group (SMH) and gives us an “under the hood” look at Biotechnology (IBB) as well.

The pair finish with a look at viewer symbol requests that today included quite a few Semiconductor stocks and a smattering of other Tech and Energy stocks.

01:58 DP Signal Tables

04:44 Market Overview and Analysis

13:48 Magnificent Seven

19:37 Extra Bond Discussion

23:52 Questions

27:12 Sector Rotation

34:22 Semiconductors and Biotechs

38:38 Symbol Requests

Don’t miss out on attending the DP Trading Room LIVE! Register once here: https://zoom.us/webinar/register/WN_D6iAp-C1S6SebVpQIYcC6g#/registration

Definitely don’t miss out on our free two week trial of any of our DecisionPoint subscriptions! Try out the new Scan Alert System or amp up your trading with DP Alert and DecisionPoint Diamonds! Just use coupon code: DPTRIAL2 when you subscribe here: https://www.decisionpoint.com/products.html

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

Before you trade any stock or ETF, you need to know the trend and condition of the market. The DP Alert gives you all you need to know with an executive summary of the market’s current trend and condition. It not only covers the market! We look at Bitcoin, Yields, Bonds, Gold, the Dollar, Gold Miners and Crude Oil! Only $50/month! Or, use our free trial to try it out for two weeks using coupon code: DPTRIAL2. Click HERE to subscribe NOW!

Learn more about DecisionPoint.com:

Watch the latest episode of the DecisionPointTrading Room on DP’s YouTube channel here!

Try us out for two weeks with a trial subscription!

Use coupon code: DPTRIAL2 Subscribe HERE!

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.

Helpful DecisionPoint Links:

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

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

ITBM and ITVM

SCTR Ranking

Bear Market Rules

The Russell 2000 ETF managed a double-digit gain in 2024, but did it the hard way with several deep pullbacks. Pullbacks within uptrends are opportunities and we can find such opportunities using %B.

The chart below shows the Russell 2000 ETF (IWM) with the Zigzag(8) indicator. This indicator changes direction when there is a move greater than 8%, which means it ignores price moves that are less than 8%. I am showing this indicator to highlight five pullbacks of 8% or more in 2024. That’s a lot. In contrast, the S&P 500 SPDR (SPY) only experienced one 8+ percent pullback in early August.

Overall, IWM advanced 10% in 2024. That seems like a good year, but it was a “hard” 10% when we include the five 8+ percent pullbacks. This is simply the nature of small-cap stocks. They are less “trendy” than large-caps and have higher betas, making them more susceptible to wider fluctuations. Traders need to consider this when trading small-caps. As noted in Chart Trader this week, we see similar price action in the S&P 500 EW ETF (RSP) and S&P MidCap 400 SPDR (MDY).

Click here to take Chart Trader trial and get immediate access.

Buying upside breakouts is probably not the best strategy for trading IWM. Instead, traders should consider pullbacks and mean-reversion opportunities. We can identify such opportunities using Bollinger Bands (20,2) and %B (20,2). The middle line on the Bollinger Bands is the 20-day SMA and the bands are two standard deviations above and below. A close below the lower band means price fell two standard deviations and this creates an oversold condition.

Chartists can quantify oversold conditions using %B, which falls below 0 when the close is below the lower Bollinger Band. The blue lines on the chart above show %B dipping below 0 four times in 2024. Note that I would also only look for oversold conditions when price is above the 200-day SMA (long-term uptrend). When the bigger trend is up, a close below the lower Bollinger Band signals an oversold condition that can lead to a bounce.

December was a rough month for many stocks and ETFs. Even so, the weight of the evidence remains bullish for stocks and these pullbacks look like corrections within bigger uptrends. This week’s reports and videos focused on long-term breadth indicators, short-term oversold breadth, leading ETFs and a dozen ETFs with tradable pullbacks.

Click here to take a Chart Trader trial and get immediate access.

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In this video, Mary Ellen analyzes the divergence between the S&P 500 and the Nasdaq while highlighting some of the areas driving Growth stocks. She also talks about the continuation rally in Energy and Utility stocks and shares which stocks are driving these areas higher.

This video originally premiered January 3, 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.

Has it been a while since the broader market indexes closed in the green? It certainly seems that way.

After what looked like a weak start to the new year, the stock market showed us it still had legs. The week’s trading day ended with the broader stock market indexes all closing in the green. But in the first half hour of the trading day, things didn’t look great. There was a lot of choppy movement, but it settled down and went higher and finished strong. Nine of the 11 S&P sectors closed higher with Consumer Discretionary at the top (more on that below).

Friday was the last day of the Santa Claus Rally. While Santa skipped Wall St. this year, Friday’s price action in the S&P 500 ($SPX) left investors optimistic. The S&P 500 was able to hold on to its November lows (see the daily chart of S&P 500 below), which is an encouraging sign. But we’re not out of the woods yet.

FIGURE 1. S&P 500 HOLDS ABOVE NOVEMBER LOWS. Friday’s price action was encouraging but increasing breadth would be more confirming of a turnaround.Chart source: StockCharts.com. For educational purposes.

Thursday’s price action was nerve-wracking — there was a time when the index was trading below its November lows. Fortunately, it recovered and closed a little above it. Friday’s close was encouraging, with the S&P 500 gaining 1.26%, hitting resistance at its 50-day simple moving average (SMA). But the market breadth indicators in the lower panels need to be stronger. The S&P 500 Bullish Percent Index is at 41, the NYSE Advance-Decline Line is declining, and the percentage of S&P 500 stocks trading above their 200-day moving average is 56.

Friday’s MarketCarpet based on the performance of the S&P 500 shows that heavy-weighted large caps such as NVIDIA Corp. (NVDA), Microsoft Corp. (MSFT), Alphabet Inc. (GOOG and GOOGL), Meta Platforms (META), and Tesla Inc. (TSLA) ended the day higher.

FIGURE 2. MARKETCARPET FOR JANUARY 3. Most of the higher market cap stocks closed higher on Friday.Image source: StockCharts.com. For educational purposes.

TSLA had a massive move rising 8.10% closing the gap between December 31 and January 2. TSLA is a stock to monitor, especially since it has a deep connection with the new administration set to take office on January 20. The stock bounced on Friday after five down days.

NVDA’s stock price also had an impressive rally on Friday after consolidating since early November. These two stocks, TSLA and NVDA, helped the Consumer Discretionary and Technology sectors take the top two positions in Friday’s sector performance.

Overall, Friday’s price action was a ray of hope that perhaps the January Barometer  — as the S&P 500 goes in January, so goes the year — might be the one out of the trifecta that can come through. The January Barometer was devised by Yale Hirsch and has an 83.3% accuracy rate.

Steel, Beer, and Used Cars

While many tech stocks saw big gains, it wasn’t the same for US Steel Group (X). President Biden blocked the takeover of the company by Nippon Steel, resulting in a 6.53% drop in the price of X.

Alcoholic beverage companies didn’t have a great day either after US Surgeon General, Vivek Murthy, said alcoholic drinks should include cancer risk warnings on their labels. Shares of Anheuser-Busch InBev (BUD), Molson Coors Brewing Co. (TAP), Boston Beer Co. (SAM), and Constellation Brands (STZ) all fell on Friday.

Shares of Carvana (CVNA) fell over 11% after Hindenberg Research accused the company of accounting manipulation. Although Carvana denied the allegations and the stock received an upgrade from J.P. Morgan analysts, it didn’t help lift the stock price. CVNA’s stock price fell 17.53% (see chart below).

FIGURE 3. WEEKLY CHART OF CVNA STOCK. Two sets of Fibonacci retracement levels are drawn on the chart, one from a previous high to low (blue) and another from a more recent low to high (red).Chart source: StockCharts.com. For educational purposes.

Carvana had a high StockCharts Technical Rank (SCTR) score, and we’ve covered the stock in our past SCTR Reports. Once the SCTR score fell below the 90 level on December 23, it raised a red flag. Combine that with a break below the 61.8% Fibonacci retracement from a previous high to low (blue line) and a relative strength index below 70 and you have a clear sell signal.

It will be interesting to see how this story develops. If things clear up and CVNA can show that it didn’t engage in accounting manipulations, the stock price could turn around and rise quickly.

Yields, US Dollar, Oil

The bond market had a choppy day. The 10-year yield closed at 4.596%, which hurt bond prices. The US dollar surged on Thursday but pulled back a bit on Friday. The chart of the Invesco DB US Dollar Index Bullish Fund (UUP) displays that Friday’s price action was within Thursday’s range. There’s no sign of a weakness in the US dollar, which continues to remain strong.

FIGURE 4. DAILY CHART OF INVESCO DB US DOLLAR INDEX BULLISH FUND. The dollar has been rising steadily since October.Chart source: StockCharts.com. For educational purposes.

Crude oil prices rose today. The United States Oil Fund (USO) was up 1.83% on Thursday and up 1.29% on Friday. Oil prices have been going sideways since October but recent price action shows that it may be breaking out of its slump.

For a short trading week, that’s a lot of moving parts. Although stocks closed higher on Friday, there’s still not enough clarity on the charts to show a reversal. Next week could tell a different story.

End-of-Week Wrap-Up

• S&P 500 down 0.48% for the week, at 5942.47, Dow Jones Industrial Average down 0.60% for the week at 42,732.13; Nasdaq Composite down 0.51% for the week at 19,621.68
• $VIX up 1.13% for the week, closing at 16.13
• Best performing sector for the week: Energy
• Worst performing sector for the week: Materials
• Top 5 Large Cap SCTR stocks: Applovin Corp. (APP); Palantir Technologies (PLTR); Reddit Inc. (RDDT); Astera Labs, Inc. (ALAB); MicroStrategy Inc. (MSTR)

On the Radar Next Week

• December PMI
• November Factory Orders
• November JOLTS Report
• December ISM Services
• December Non-Farm Payrolls
• FOMC Minutes
• Fed speeches from Cook, Barkin, Schmid, and Bowman

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.

Obviously, there will be many ups and downs in 2025 and no one chart or indicator can be relied upon 100% to help guide us throughout the year. But some key and very influential areas of the market do meet crossroads from time to time and it seems like one very important industry group is “on the clock” and should really garner our attention right now.

Regional Banks

While I don’t look for market-beating returns out of regional banks (KRE) to feel good about a secular bull market, I really do want to see them participate in market advances. If we look back at the last 5 years, the KRE has been a serious laggard, but its relative strength vs. the benchmark S&P 500 has shown some life since July 2024, at the time that the June Core PPI was released. Wall Street immediately moved into regional banks in droves as the likely fed funds rate cuts ahead would directly increase profits significantly for all banks, but especially small to mid size banks. But will this newfound strength continue? Well, let’s look at the key levels using 3 different time frames.

Weekly

The big picture has clearly been improving, which bodes well for 2025. However, we don’t want to begin to see cracks in the house foundation turn into a collapsing house. I like the recovery this week after testing key price support around 59. But a drop below 59 could lead to a lower channel line support test, closer to 53. That would be another 10% drop, which wouldn’t be good. Let’s move to the next chart:

Daily

This is an interesting chart. The channel lines don’t connect perfectly, especially the lower uptrend line, but it’s close. Furthermore, the KRE printed a double bottom at 59, almost squarely on gap support that was created by the 2024 Presidential Election results. In order to feel more bullish about this chart, I’d like to see the KRE move higher and clear both the declining 20-day EMA and recent price resistance at about 61.50. For a final look at the KRE, check this out.

Hourly

This is the crack in the foundation. While absolute price support has held and we now show a potential double bottom, relative action tells us a different story as the KRE has moved to another relative low on this hourly chart. Which way will the KRE bounce? If it can clear its current consolidation range by closing above 61.50, the odds of a bullish reversal improve considerably and will likely spill over into the daily and weekly charts above. On the other hand, should the KRE turn lower again and fail to hold 58.80 price support, the hourly breakdown could lead to daily, and then weekly, breakdowns as well.

Market Vision 2025

Regional banks is just one key industry group to watch early in 2025. I see a few others that I’ll be discussing tomorrow at our MarketVision 2025 event, “The Year of Diverging Returns”, which begins at 10:00am ET. To learn more about the event and to register, please CLICK HERE.

Happy trading!

Tom

As digital payments and fintech services continue to reshape the global economy, Block, Inc. (SQ) stands out as a potential beneficiary of this shift. A favorable technical signal and an attractive fundamental backdrop present a compelling bullish thesis for SQ. In this article, we will explore the reasons behind this positive outlook and discuss a strategy you can use to capitalize on it — all identified instantly through the OptionsPlay Strategy Center on StockCharts.com.

Technical Analysis

A closer look at SQ’s chart reveals several bullish indicators:

• Breakout and Retest of Support. After breaking above the $84 resistance area in November, SQ has since come back to retest this level as support.
• Strong Risk/Reward Setup. The successful retest suggests a favorable risk/reward, where the downside risk is far more limited than the upside potential to our upside target of $150.

FIGURE 1. SQ STOCK DAILY CHART. The stock is retesting its $84 area as support.Chart source: StockCharts.com. For educational purposes.

Fundamental Analysis

From a fundamental perspective, SQ’s outlook remains promising:

• Attractive Valuation. Despite Block’s strong growth prospects, the company is currently trading at a 30% discount relative to its peers.
• Robust Growth Metrics. SQ’s expected 44% earnings per share (EPS) growth is nearly three times higher than its peers’ 13%, highlighting the company’s potential for earnings expansion. Projected 11% revenue growth outstrips the industry median of 7%, confirming the company’s ability to expand its top line.
• Recent Earnings Insights. Block’s Q3 2024 results showed robust growth in gross profit and a significant turnaround in net income, fueled by the strength of its Cash App and Square ecosystems. While there were some concerns around revenue shortfalls and ongoing regulatory scrutiny of Cash App, the company remains optimistic about continued margin expansion into 2025, forecasting at least 15% overall gross profit growth and new initiatives to drive further gains.

These fundamentals suggest that SQ is well-positioned to capitalize on the continued rise of digital payments, offering investors a potentially rewarding opportunity at current valuations.

Options Strategy

To leverage SQ’s bullish outlook, the OptionsPlay Strategy Center suggests selling the Feb 14 $86/80 Bull Put Spread @ $2.30 Credit.

This entails the following:

• Sell: February 14, 2025, $86 Put at $4.60
• Buy: February 14, 2025, $80 Put at $2.30
• Net Credit: $2.30 per share ($230 total per contract)

FIGURE 2. DETAILS OF A PUT VERTICAL SPREAD IN SQ STOCK.

Trade Details

• Maximum Potential Reward: $230
• Maximum Potential Risk: $370
• Breakeven Point: $83.70 (strike of the sold put minus the net credit per share)
• Probability of Profit: ~56.46% (if SQ closes above $83.70 by February 14, 2025)

By selling a higher strike put and buying a lower strike put, you collect a premium upfront and benefit if SQ stays above the breakeven price at expiration. This strategy offers a balanced approach to potential upside while containing risk.

Unlock Real-Time Trade Ideas With OptionsPlay Strategy Center

This bullish setup in SQ was identified almost instantly using the OptionsPlay Strategy Center at StockCharts.com. By running a Bullish Trend Following scan, the platform highlighted SQ and structured the optimal options trade without the need for extensive research or guesswork.

FIGURE 3. THE BULLISH TREND FOLLOWING SCAN HIGHLIGHTED SQ AS A POTENTIAL OPTIONS TRADING CANDIDATE.

Subscribing to the OptionsPlay Strategy Center provides you with:

• Automated Market Scans. Quickly spot the best trading opportunities aligned with your market outlook.
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Don’t let valuable opportunities slip away. Subscribe to the OptionsPlay Strategy Center today, and elevate your trading with the guidance and clarity you need to make informed decisions. Find the best options trades swiftly, every single day, and empower your investing journey with this cutting-edge tool.

We monitor the weekly SPY chart and present it to our subscribers every Friday in our DP Weekly Wrap. We have been watching a bearish rising wedge on the weekly chart. The rising wedge pattern implies that you will get a breakdown from the rising bottoms trendline. That is exactly what happened this week.

The one problem with these patterns is that they don’t give us a minimum downside target as most chart patterns provide. For me, my back of the napkin calculation is to look at the beginning of the pattern and determine the height. That is at around 60 points (500 + 60 = height of the back of the pattern). That would imply a drop of the same amount from the breakdown point. It happened just under 600 so I would say the downside target of the pattern would be to 540 which is a strong area of support.

The weekly PMO has topped and given us a new Crossover SELL Signal as of last Friday. We will say that the weekly PMO is flat above the zero line and that typically implies pure strength in a move, however this Crossover SELL Signal is an attention flag. We can also see that the PMO carries a negative divergence with price tops.

Conclusion: The market is long overdue for a correction if not a bear market. The breakdown on the weekly chart and the new weekly PMO Crossover SELL Signal are attention flags that the correction may be upon us. It’s probably a good idea to make sure your positions have listed stops.

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

Before you trade any stock or ETF, you need to know the trend and condition of the market. The DP Alert gives you all you need to know with an executive summary of the market’s current trend and condition. It not only covers the market! We look at Bitcoin, Yields, Bonds, Gold, the Dollar, Gold Miners and Crude Oil! Only $50/month! Or, use our free trial to try it out for two weeks using coupon code: DPTRIAL2. Click HERE to subscribe NOW!

Learn more about DecisionPoint.com:

Watch the latest episode of the DecisionPointTrading Room on DP’s YouTube channel here!

Try us out for two weeks with a trial subscription!

Use coupon code: DPTRIAL2 Subscribe HERE!

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.

Helpful DecisionPoint Links:

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

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

ITBM and ITVM

SCTR Ranking

Bear Market Rules

HAPPY NEW YEAR!!!

Ever since the introduction of RRG back in 2011 many people have asked me questions like: “What is the track record for RRG” or “What are the trading rules for RRG”?

My answers have always been, and will continue to be, “There is no track record for RRG as there is not one set of rules”. Relative Rotation Graphs are primarily a data visualization tool that can be applied to many different markets, on many different time frames and with varying degrees of risk.

Most of the time I countered these questions with “What is the track record of a bar chart?” or “What are the trading rules for a bar chart?”

However, it is possible to come up with some “rules” or “conditions” that can be tested and repeated. Two pre-requisites for a quantitative and rules-based approach. On and off over the last few years I have been “playing around” with a few different approaches to get to something that can run objectively.

This is still very much a work in progress project but my plan for 2025 is to share the outcomes of version 1 of this approach, using the 11 SPDR sector ETFs, in this blog on a weekly basis and track the results.

I am not planning to disclose all the ins and outs of the methodology at this point in time as this may lead to an investable product at some stage. But the basis lies in combining various weekly and daily RRG data points into one metric and create a ranking for the 11 sectors which allows me to determine “The best five sectors”.

Going forward I will publish this list on a weekly basis and track the performance of a portfolio that consists of the best 5 sectors each at a 20% weight.

In the first week of 2025 this is the portfolio we start with:

1. XLY
2. XLC
3. XLF
4. XLK
5. XLI

Weekly RRG

Daily RRG

Price Charts

Consumer Discretionary

Consumer Discretionary is holding up well after the upward break. The area around 210 should act as support in case of a decline.

Relative strength continues strongly.

Communication Services

Communication Services is testing the former rising resistance line as support while relative strength broke out of its trading range and seems to be moving higher.

Financials

The rhythm of higher highs and higher lows on the price chart remains intact. Relative strength is now testing the upper boundary of the former trading range as support.

Technology

Technology continues to struggle with overhead resistance around the 240 area but there is no significant drop in prices as seen in other sectors. Relative strength remains within the boundaries of its trading range.

Industrials

Industrials is testing the rising support line, as long as this holds things are still ok. Looking at relative strength it is clear why this is the fifth sector. A small double top has completed and some relative weakness seems to be lying ahead.

#StayAlert and have a great weekend, –Julius