When the stock market slides significantly, it’s natural to question if the market has bottomed and getting ready to bounce. 

In this video, David Keller, CMT highlights the Bullish Percent Index (BPI) as a key indicator to monitor during corrective moves. Learn more about how the BPI is derived, what current levels indicate about the likelihood of a short-term rally, and what you should see in the BPI to gain confidence in a recovery in the S&P 500. Dave looks at how the stock market performed in past instances when the BPI was as low as it is now.

This video was published on April 10, 2025. Watch on StockCharts’ dedicated David Keller page!

Previously recorded videos from Dave are available at this link.

S&P 500 earnings are in for 2024 Q4, and here is our valuation analysis.

The following chart shows the normal value range of the S&P 500 Index, indicating where the S&P 500 would have to be in order to have an overvalued P/E of 20 (red line), a fairly valued P/E of 15 (blue line), or an undervalued P/E of 10 (green line). Annotations on the right side of the chart show where the range is projected to be based upon earnings estimates through 2025 Q4.

Historically, price has usually remained below the top of the normal value range (red line); however, since about 1998, it has not been uncommon for price to exceed normal overvalue levels, sometimes by a lot. The market has been mostly overvalued since 1992, and it has not been undervalued since 1984. We could say that this is the “new normal,” except that it isn’t normal by GAAP (Generally Accepted Accounting Principles) standards.

We use GAAP earnings as the basis for our analysis. The table below shows earnings projections through December 2025. Keep in mind that the P/E estimates are calculated based upon the S&P 500 close as of March 31, 2025. They will change daily depending on where the market goes from here. It is notable that the P/E remains outside the normal range.

The following table shows where the bands are projected be, based upon earnings estimates through 2025 Q4.

This DecisionPoint chart keeps track of S&P 500 fundamentals, P/E and yield, and it is updated daily — not that you need to watch it that closely, but it is up-to-date when you need it.

CONCLUSION: The market is still very overvalued and the P/E is still well above the normal range. Earnings have ticked up and are projected to trend higher for the next four quarters. High valuation applies negative pressure on the market, but other more positive factors can keep the market in overvalued territory. The current bear market has brought the market to a less overvalued status, but there is still a long way to go to more normal valuation.

Watch the latest episode of DecisionPoint on StockCharts TV’s YouTube channel here!

(c) Copyright 2025 DecisionPoint.com

Technical Analysis is a windsock, not a crystal ball.

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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Bear Market Rules

Is the stock market volatility making you nervous? 

In this video, Grayson Roze and Julius de Kempenaer unpack the volatile market environment and discuss pain points, some of the “bright spots” they are seeing in the market, and the StockCharts tools they are using to identify shifts in market sentiment.

Learn how you can use market breadth indicators, support levels, and chart patterns to identify turning points in the market. You will also discover the tools Grayson and Julius rely on to help them navigate the stock market.

This video premiered on April 9, 2025.

For more videos like this, check out the StockCharts TV channel on YouTube.

Tariff turmoil continues sending the stock market into a turbulent spin. Tariffs went into effect at midnight, which sent equities and bond prices lower. Then before 1:30 PM ET Wednesday, President Trump announced that China would be slapped with 125% tariffs and the reciprocal tariffs are on pause for 90 days.

This was a huge turning point for the market. Without skipping a heartbeat, buyers rushed in and accumulated equities, especially large-cap growth stocks. The S&P 500 closed higher by 9.52%, the Nasdaq was up 12.16%, and the Dow was up 7.87%. Small and mid-cap stocks also saw substantial gains. 

Wednesday’s turnaround may have been the biggest one-day point gains in history for some of the broader stock market indexes but let’s look at the charts to see a clearer picture of what’s going on with this whacky stock market. 

A View of the Broader Stock Market

From a long-term perspective, the uptrend in the S&P 500, Nasdaq, and Dow are still intact. The weekly charts of the three indexes are also encouraging. But the daily charts are not yet screaming buy signals. Let’s start with the daily chart of the Nasdaq.

FIGURE 1. DAILY CHART OF NASDAQ COMPOSITE. The index has hit the resistance of its 21-day exponential moving average and breadth indicators in the lower panels show some breadth indicators are improving but not enough to suggest a bottom in the index.Chart source: StockCharts.com. For educational purposes. 

The Nasdaq touched its 21-day exponential moving average (EMA), which could be the first resistance level for it to overcome. The three breadth indicators in the lower panels—Nasdaq Composite Bullish Percent Index (BPI), NASDAQ Advance-Decline Line, and percentage of stocks trading above the 200-day moving average of the Nasdaq—are improving slightly but they are not showing signs of bullishness. 

Wednesday’s best-performing S&P sector was Technology followed by Consumer Discretionary. Rotation into these sectors implies risk-on investing. However, since the Nasdaq’s daily trend is still down, don’t let your emotions guide your investment decisions. Look for confirming signals before entering any long positions. 

The S&P 500 daily chart is not much different (see below). The index came close to touching its 21-day EMA. If the index opens higher on Thursday, watch this EMA closely. A break above it would be a positive move but there still needs to be a series of higher highs and higher lows for an uptrend to be established. 

FIGURE 2. DAILY CHART OF THE S&P 500 INDEX. It’s worth watching the 21-day EMA in the S&P 500. If the index breaks through that level and starts showing signs of an uptrend and the market breadth indicators suggest increasing bullish participation, it may be time to think about adding positions. But, we’re far from that point. Chart source: StockCharts.com. For educational purposes.

The market breadth indicators in the lower panels are showing some signs of improvement. The percentage of stocks trading above the 200-day moving average of the S&P 500 is at 31.80, which is encouraging but you want to see it at or above 50%. Like the Nasdaq, the S&P 500 is showing no clear signs of an uptrend, so tread carefully.

Replace the symbol in either of the above charts with $INDU and you’ll see that the Dow is in a similar position as the Nasdaq and S&P 500. 

Bonds to the Rescue?

Although equities showed a lot of movement on Wednesday, don’t lose sight of the shenanigans in the bond world. The 10-year U.S. Treasury yields rose as high as 4.47% but pulled back and closed at 4.40%, which is still relatively high. The iShares 20+ Year Treasury Bond ETF (TLT) closed 3.24% higher. 

This price action in TLT is worth watching closely. Bond prices fall when yields rise and Wednesday started out with stock and bond prices falling. This is unusual since bond prices usually rise when stocks fall. There was a lot of bond selling taking place the previous night which may have been due to the unwind of the basis trade by hedge funds. Since we’re technical analysts, instead of getting into the nitty gritty details of this hedge fund strategy, let’s analyze the five-year weekly chart of TLT.

FIGURE 3. FIVE-YEAR WEEKLY CHART OF TLT. This bond ETF has been in a downward trend for the last five years. Has its time come or will it linger in the depths of the abyss for longer? Chart source: StockCharts.com. For educational purposes.

Bond prices have been trending lower over the past five years and showing no signs of a reversal. Although TLT came off its lows, it still has a long way to go before showing modest signs of an uptrend. 

The Bottom Line 

Wednesday’s big turnaround didn’t change the big picture. We’re not out of the woods yet. And there’s more excitement to look forward to — the March CPI on Thursday morning and earnings season kicks off on Friday. A note about earnings — we probably won’t see much of an impact this quarter but keep your ear open for any chatter on how tariffs will affect profitability. 

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.

Is the stock market on the verge of crashing or has it bottomed?

In this video, Joe Rabil uses moving averages and Fibonacci retracement levels on a longer-term chart of the S&P 500 to identify support levels that could serve as potential bottoms for the current market correction.

Understand why the 2025 stock market is different from the 2022 one and explore how the market drop can impact the SPY, QQQ, DIA, and IWM.

The video premiered on April 9, 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.

The market is in a tailspin as tariffs add volatility to the market. Carl and Erin believe the SPY is in a bear market given key indexes like the Nasdaq are already in bear markets. It’s time to consider where the key support levels are.

Carl addressed his thoughts of where key support lies on the SPY during our question section of the trading room. You’ll also get his insight on current market conditions with his review of the market indicators in general as well as a look at Yields, Bonds, Crude Oil, Bitcoin among others.

During the review he pointed out how the members of our 26 indexes, sectors and groups are faring from their recent highs. Many are in bear markets.

After his market analysis, Carl walked us through the Magnificent Seven which are currently all in bear markets with declines of more than 20% or more. He analyzed both the daily and the weekly charts to give us perspective and support levels.

Erin took the controls and gave us her view of sector rotation using the Price Momentum Oscillator (PMO) sort to bring the strong sectors to the top and the weaker sectors on the bottom. The results were not surprising.

Finally, the pair finished with a look at viewer symbol requests.

01:03 DP Signal Tables

05:05 Market Overview

18:55 Magnificent Seven

25:42 Questions (including Key Support Levels)

34:10 Sector Rotation

42:26 Symbol Requests

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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.

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

I am attending and speaking at the CMTA West Coast Regional Summit in San Francisco from Friday, 4/4, to Sunday, 4/6, so I don’t have enough time to write a full blog article updating the best five sectors.

So, instead, I have added the graphs and the new ranking to this article for review, and I will update the text and the positions in the portfolio on Monday.

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

How low can the S&P and the Nasdaq fall? More importantly, how can an investor navigate this volatile environment?

In this eye-opening video, Mary Ellen McGonagle delves into the stock market’s fall, identifies key support levels, and compares them to past bear markets. She also discusses inverse ETFs and their past price action. Don’t miss out on these key technical points. They will help you identify when the market is getting ready to reverse.

The video was originally published on April 4, 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.

The previous week was short; the Indian markets traded for four days owing to one trading holiday on account of Ramadan Id. However, while staying largely bearish, the markets weathered the storm inflicted by the US announcing reciprocal tariffs on almost everyone and kicking off a serious trade war. The Indian markets stayed extremely resilient but ended the week on a negative note. The Index moved in the range of 707.70 points over the past four sessions. The volatility also rose; the India VIX surged 8.16% on a weekly basis to 13.76. The Indian benchmark Index closed with a net weekly loss of 614.90 points (-2.61%).

The equity markets across the world are likely to stay under pressure and in a bit of turmoil. However, the Indian markets are likely to remain relatively resilient. We live in an interconnected world; it is not surprising if we see the markets staying under pressure along with the other equity markets. However, what is expected to stand out will be the Indian market’s expected relative outperformance. This was evident over the previous week as while the Nifty and Nifty 500 lost 2.61% and 2.50%, the US key indices SPX, Nasdaq, and the Dow lost 9.08%, 10.02%, and 7.86%, respectively. While India’s VIX spiked just over 8%, the CBOE VIX has spiked 109.14% on a weekly basis. While the Indian markets may also show jitters and stay under pressure, this relative outperformance is likely to persist.

The coming week is again short, with Thursday being a trading holiday for Shri Mahavir Jayanti. The markets are expected to start lower on Monday following global weakness. Over the coming week, we can expect the levels of 23050 and 23300 to act as potential resistance points. Importantly, the supports are expected to come in at 22600 and 22450.

The weekly RSI is at 44.93; it stays neutral and does not show any divergence against the price. The weekly MACD is bearish; however, the sharply narrowing Histogram hints at a likely positive crossover in the future. A strong black-bodied candle showed the sustained downward pressure on the markets.

The pattern analysis of the weekly chart shows that after rebounding off the 100-week MA, the Nifty staged a strong rally that halted at the 50-week MA. This MA is placed at 23849; this was the support that the Index had violated on its way down, and now acts as a resistance. The previous week also saw the Nifty slipping below the 20-week MA positioned at 23412. While the Index stays in a secondary trend, it remains in a large but well-defined trading range that is created between 23400 on the upper side and 22100 on the lower side.

 Despite being short, the coming week is expected to see a wider trading range and some more volatility staying ingrained in it. It is strongly recommended that while the valuations look tempting enough to initiate buying, all fresh buying should be done in a staggered manner. One must not go out and buy everything all at once, but one should do it in a staggered way while allowing the prices to stabilize and indicate a potential reversal point. Leveraged positions must be kept at modest levels, and fresh purchases must be kept limited to the places where there is emerging relative strength. A cautious approach 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 Bank and Financial Services indices are rolling strongly inside the leading quadrant. Besides these two indices, the Nifty Commodities, Metal, Infrastructure, and Services Sector Indices are also inside the leading quadrant.

The Nifty Pharma Index is the only one inside the weakening quadrant.

The Nifty IT Index has rolled inside the lagging quadrant and is languishing inside that quadrant along with the Nifty Midcap 100 index. The Nifty Realty and the Media Index are also in the lagging quadrant; however, they are improving relative momentum against the broader markets.

The Nifty PSE and Energy Indices are inside the improving quadrant along with the PSU Bank index, which is seen as strongly improving its relative momentum. The FMCG, Auto, and Consumption Indexes are also inside the improving quadrant but are seen rolling towards the lagging quadrant again while giving up on their relative momentum against the broader markets.

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

The stock market hoped for curtailment of tariffs on Wednesday, but that didn’t happen. Even the better-than-expected March non-farm payrolls weren’t enough to turn things around.

The stock market slid sharply with the S&P 500 ($SPX), Nasdaq Composite, and Dow breaking through key technical support levels and closing very close to the low of the day’s range.

The StockCharts MarketCarpets was a sea of deep red with a few small green islands. All S&P sectors were trading lower on Friday. 

The selloff was across the board and precious metals, which soared in the early part of the week, got slammed after the tariff announcement. When investors sell off equities and precious metals, it’s a sign of elevated fear, which is reflected in the spike in the Cboe Volatility Index ($VIX). It closed at 45.12, close to its high of 45.56.

Not a Pretty Picture

The adage, “The stock market takes the stairs up and the elevator down,” rings true. Unfortunately, things got ugly quickly. It’s a volatile environment, and if your portfolio includes mostly equities, you’re probably beside yourself. But it’s not time to let your emotions get the better of you. Neither is it the time to engage in dip buying. If you look at any chart of the market, it’s clear which direction the market is heading. 

The three-year weekly chart of the S&P 500 ($SPX) below shows the index has dropped below its August lows. 

FIGURE 1. THREE-YEAR WEEKLY CHART OF THE S&P 500 INDEX. It was a rough week in the stock market with the S&P 500 closing below its 100-week simple moving average. Chart source: StockCharts.com. For educational purposes.

In March, the S&P 500 crossed below its 40-week simple moving average (SMA), the equivalent of the 200-day SMA. Wednesday’s tariff announcements sent the index even lower, breaching its 100-week SMA, approximately a two-year average. Another concerning point is that Friday’s close is below the August 2024 low. This increases the probability of the index dropping further, perhaps as low as its 150-week SMA. But then again, you never know what the market is going to do. 

A smart investor is always engaged with the market in good times and bad. It’s important to observe the price action at key support levels to get an insight into when buyers come back into the market. 

Looking at Market Breadth 

The Bullish Percent Index (BPI), a breadth indicator that gives a bird’s eye view of the internals of different indexes and sector ETFs, isn’t encouraging, at the moment. The only sectors or indexes at or above 50, as of this writing, are the S&P Consumer Staples Sector BPI ($BPSTAP) and the S&P Utilities Sector BPI ($BPUTIL). Despite the slightly bullish values, the corresponding ETFs are trading below their 50-day SMA. 

The chart below displays $BPUTIL with the chart of the Utilities Select Sector SPDR Fund (XLU). Even though the BPI of the Utilities sector is above 50, it’s still trending lower and XLU just crossed below its 50-day SMA.

FIGURE 2. THE UTILITIES SECTOR IS ONE SECTOR WITH A BPI OVER 50. While a BPI over 50 indicates bulls are in favor, the chart of XLU has fallen below its 50-day SMA. Generally, breadth is leaning towards bearishness. Chart source: StockCharts.com. For educational purposes.

Sellers are in control across the board. The key will be to identify when buyers are in favor. And for that, you need to monitor the BPI and other breadth indicators.  

Investor sentiment got overly bearish quickly. When this occurs, investors usually look for signs of capitulation. We’re not seeing those signs yet, but it’s worth adding sentiment indicators to your toolkit. 

Sentiment Check

At some point, the selling will stop and buyers will come back in. The worst action to take now is to enter positions when you think the market has hit its low, only to catch a falling knife.

When markets are at extreme levels of fear or greed, sentiment indicators such as the VIX can be helpful. Besides the VIX, the American Association of Individual Investors (AAII) Sentiment Survey helps identify when investors are extremely optimistic or pessimistic. Generally, when emotions reach extreme levels, it may be an alert to move in the opposite direction of the crowds.

The five-year weekly chart below displays the S&P 500 with the AAII bullish minus bearish sentiment in the lower panel.

FIGURE 3. S&P 500 AND BULLISH VS. BEARISH SENTIMENT. Bearish sentiment is relatively high and the S&P 500 could fall if the bearish sentiment persists. Chart source: StockCharts.com. For educational purposes.

The lower panel shows that investor sentiment is negative, similar to between April 2022 and September 2022. Note how the market went through a correction before resuming its uptrend. 

The price action in the S&P 500 coincides with extreme bearish sentiment and could remain this way for an extended period. How will you know if sentiment has reached extreme levels? It can be challenging but constant monitoring of market breadth and sentiment indicators can reveal a shift in behavior. When buyers come back in, the indexes break above resistance levels, and momentum indicators turn bullish, there’s a chance the bullish trend will resume. 

The Bottom Line  

Investors should stay on the sidelines until the unwinding of positions is in the rearview mirror. As painful as it may be to watch your portfolio lose value, at some point the selling will stop and buyers will get back in. Look for signs of this occurring before adding any positions to your portfolio. Congratulations to investors who followed the traditional 60% stocks, and 40% bonds portfolio mix. Rising bond prices provide some cushion to falling equity prices. 

End-of-Week Wrap-Up

• S&P 500 down 9.08% on the week, at 5074.08, Dow Jones Industrial Average down 7.86% on the week at 38314.86; Nasdaq Composite down 10.02% on the week at 15,587.79.
• $VIX up 109.28% on the week, closing at 45.31.
• Best performing sector for the week: Consumer Staples
• Worst performing sector for the week: Energy
• Top 5 Large Cap SCTR stocks: Corcept Therapeutics, Inc. (CORT); Elbit Systems, Ltd. (ESLT); MicroStrategy, Inc. (MSTR); Palantir Technologies, Inc. (PLTR); XPeng, Inc. (XPEV)

On the Radar Next Week

• Earnings season kicks off with Delta Air Lines, Inc. (DAL), J.P. Morgan Chase (JPM), Wells Fargo (WFC), and others reporting
• March CPI
• March PPI
• FOMC minutes
• Several Fed speeches

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.