Trading is being affected by the scare of a trade war. With new tariffs being placed on Mexico, Canada and China, the market fell heavily on Friday. The same was occurring this morning, but then the tariff on Mexico was delayed by one month which helped the market breathe a sigh of relief that maybe these tariffs won’t be sticky. The market was still lower, but recovered much of its losses.

The trading room began with the DP Signal Tables giving viewers a sense of where the market currently is. Carl reviewed the charts and also covered major asset classes like the Dollar, Gold and Bitcoin.

After reviewing the market, Carl gave us his opinion on the Magnificent Seven stocks in the short and intermediate terms. Definitely a mixed bag today.

Erin took over and gave us a thorough review of Sector Rotation with a deep dive into the Energy and Consumer Discretionary sectors.

She had plenty of time to review symbol requests at the end of the program and covered many stocks including PLTR, PLNT, IBM and NVDA.

If you’d like to try out our any of our subscriptions for two weeks for free, use coupon code DPTRIAL2 at checkout. Here is a link to our products: https://www.decisionpoint.com/products.html

01:09 DP Signal Tables

03:50 Market Overview

14:40 Magnificent Seven

23:29 Sector Rotation

31:37 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

“When do I sell?” is easily the most-asked question I’ve received over the years. There are multiple answers to this question based on certain variables. The first key variable is whether you’re a day trader, short-term swing trader, or long-term buy and holder. I prefer swing trading, so my answer many times is when corroborating technical evidence tells me to sell.

My easiest sell is after a failed attempt at a breakout or a major reversing candle on heavy volume. The first one is fairly easy to see. Let’s use Palantir Technologies, Inc. (PLTR) as an example from Friday. I don’t know if PLTR is going up on Monday or later this week, but what I do know is it broke out to an intraday all-time high on Friday, then failed to hold that breakout on a closing basis. Check this out:

First, let me say that PLTR has a very strong chart. The AD line is continuously rising, a bullish cup has formed, and PLTR is a leader amongst software stocks ($DJUSSW). Second, I’m not saying PLTR is a short candidate. I’m simply saying it would be a sell for me short-term to take profits. I rarely short during secular bull markets. If it does make the breakout, I can always decide to jump back in. But I’d be looking for PLTR to pull back to form a handle off the cup pattern, or possibly even pull back to the recent low near 65. Sideways consolidation is a very real possibility after an extended advance like the one PLTR has enjoyed. If you need further evidence, look no further than NVIDIA Corp (NVDA) after its June/November/January tops. It’s still consolidating.

The two red arrows mark what “could” be a double top, resulting in a lengthy period of selling and/or consolidation. Taking profits now is a risk-management strategy, eliminating the possibility of riding PLTR back to the downside. If income taxes is a concern and you’re a long-term investor, I see nothing to suggest PLTR is a sell here. I’m only discussing my preferred short-term swing trading strategy.

A second stock with a similar look would be Parker Hannifin Corp (PH), which surged on Thursday after its earnings report. PH then tacked on further gains on Friday and found itself intraday in all-time-high territory. It too looks like a cup has formed:

The AD line here doesn’t seem quite as strong as PLTR, but PH clearly is a leader in the industrial machinery space ($DJUSFE). As I looked around the market on Friday, and really throughout the week, I couldn’t help but see a TON of companies testing key overhead price resistance.

The S&P 500 filled its gap from the severe drop on Monday morning, then printed a bearish engulfing candle on Friday:

Seeing the S&P 500 fail at all-time highs and gap resistance, with well-above-average volume makes me very nervous, especially given the overall market environment.

You’re Invited!

There are a number of bearish signals emerging that I want to discuss with our entire EarningsBeats.com community. Accordingly, we’ll be hosting a FREE webinar on Monday, February 3rd at 5:30pm ET. There’s no credit card required, but you do need to register with your name and email address. CLICK HERE for more information.

Happy trading!

Tom

Listen, I’m generally a fairly optimistic guy. I tend to see the good in the stock market, while many others continuously focus on potential selloffs ahead. I remain mostly bullish for good reason as the S&P 500 has risen 75% of all years since 1950. It just doesn’t make sense to keep trying to bet against the stock market, especially when you consider the long-term 100-year monthly chart of the S&P 500:

It’s really hard to argue with this chart. Remaining long is nearly always the best answer. However, there are occasions when bearish signals begin to line up and it’s at those times that we need to take notice. The best recent example was as we headed into 2022. Currently, I’m not seeing as many bearish signs as I saw then, but I am absolutely watching the bearish signs develop. The analogy that I would use is that MAJOR storm clouds are brewing on the horizon. Will we be able to skirt the storm, or are we about to get a direct hit?

I’m beginning to think DIRECT HIT.

Let me just talk about sentiment for a moment. One key takeaway is that it’s a contrarian indicator. When others are bullish, we should turn bearish. When others are bearish, we should turn bullish. We can reach points of excessive bullishness and we might be getting there now in the options world. Simply put, the number of equity calls traded are swamping the number of equity puts. We haven’t reached the absolutely CRAZY period of extreme equity-only put-call readings ($CPCE) that we saw in the latter part of 2021, just before the 2022 cyclical bear market drop of 28% (on the S&P 500). However, those readings were insane and likely a once-in-a-lifetime, or at least a generation, bullish period. Current readings should not be ignored as history tells us that current levels of market optimism have foreshadowed selloffs in the past.

I generally focus on the 5-day SMA (short-term direction) and the 253-day SMA (long-term direction) of the $CPCE and routinely communicate both to our EarningsBeats.com members via our Weekly Market Report. For purposes of this article, however, let’s look at a 22-day SMA of the $CPCE:

I chose 22 days in this calculation as 22 trading days represents roughly one month. The 22-day SMA signal provided above has been rock solid too, which doesn’t hurt. Sentiment really does provide us clues about market direction and we’re at a level on this 22-day SMA that’s at least worth considering.

This is the tip of the iceberg in terms of bearish signals.

Bracing For A Drop

One of our favored features of our service is our Portfolios. Our flagship Model Portfolio is very aggressive and has outperformed the benchmark S&P 500 by a mile since its inception on November 19, 2018. Here are our Model Portfolio returns, by calendar year, since inception (S&P 500 return in parenthesis):

• 2018 (Nov 19-Dec 31): -1.32% (-6.83%)
• 2019: +51.92% (+28.88%)
• 2020: +100.96% (+16.26%)
• 2021: +2.06% (+26.89%)
• 2022: -32.72% (-19.44%)
• 2023: +20.36% (+24.23%)
• 2024: +48.30% (+23.31%)
• 2025 (through Jan 31): +10.32% (+2.70%)

To give you some idea of how bearish I’m growing, I wrote to our members on Friday afternoon to let them know we were exiting all stock positions in our portfolios, a full 3 weeks ahead of schedule. Since we began the portfolios in 2018, we’ve never exited 3 weeks prior to the end of our portfolio quarter. The risk of holding is growing very rapidly and, quite honestly, why take a chance right now when we already are beating the S&P 500 by nearly 8 percentage points in just the first month of the year?

Calling a market top or bottom is never a guarantee, so we don’t look at it like that. Instead, we do our best to manage risk and the risk of a drop outweighs the potential benefit of remaining long at this time, in our opinion.

FREE Event on Monday

I like to consider everyone who follows me here at StockCharts and on YouTube as part of our EarningsBeats.com community – a community that we’ve been serving for over 20 years now. We have a history of making very bold and very accurate stock market predictions as part of our platform, where we provide market education, market guidance, and market research. Given the current market environment, historical patterns, and the evolving technical and sentiment issues, now is one of those times to make another very bold call.

Please mark your calendar and plan to join me on Monday, February 3rd, at 5:30pm ET for a very timely event, “Bearish Signals Abound: How to Navigate the Uncertainty”. The information that I will share may end up saving you a fortune. To register for this event with your name and email address, and to save your seat, CLICK HERE.

We’ll send you room instructions on Monday!

Happy trading!

Tom

In this video, Mary Ellen unpacks the week after the news drop roiled markets; coupled with major earnings reports, it’s been a rough week. She highlights what drove the biggest winners last week as we head into one of the busiest time for earnings!

This video originally premiered January 31, 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.

Today on the SP600 (IJR) the 20-day EMA crossed above the 50-day EMA giving us a “Silver Cross” IT Trend Model BUY Signal. Price is really going nowhere. Bulls might look at it as a bull flag, but the ‘flag’ is horizontal, not trending lower. That setup doesn’t usually execute as you’d expect with a breakout move that flag formations call for. The announcement of tariffs on Friday did set the market up for a strong downside reversal and IJR was hit fairly hard.

This signal seems to be late to the party. It is also very tenuous as a drop beneath the 50-day EMA would likely negate today’s Silver Cross. The PMO is still rising and is above the zero line now, but price just doesn’t look healthy. Participation of stocks above their key moving averages is trending somewhat lower. They do read above our bullish 50% threshold but not by much. This looks like an index that is weakening, not strengthening on a BUY Signal.

Conclusion: The index opened higher, but IJR struggled after the tariff announcement, more so than the SPY. It may’ve triggered a Silver Cross BUY Signal, but it doesn’t look ready to breakout. Participation is slowly thinning. We would be careful with the market as a whole right now, but IJR looks especially weak.

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 Cybersecurity ETF (CIBR) has been leading the market for a solid four months and recorded yet another new high this week. Chartists looking to take advantage of this leadership can use two timeframes: one to establish the absolute and relative trends, and another to identify tradable pullbacks along the way. Note that CIBR has been on our radar for four months and was featured in October.  

The first chart shows weekly candlesticks over the last three years. CIBR surged from November-2023 to January 2024 and then formed a long consolidation pattern from February to September. CIBR broke consolidation resistance at 58 in September (price breakout) and closed above 68 this week. This breakout opened to door to the current run.  

The indicator window shows the CIBR/RSP ratio to measure relative performance. This ratio rises when CIBR outperforms the broader market (S&P 500 EW ETF (RSP)) and falls when CIBR underperforms. This ratio broke out in early October to signal relative strength in CIBR (relative breakout). The price breakout and relative breakout proved a power combination. Keep this in mind.

With CIBR in an uptrend and leading in October, chartists can turn to daily charts to identify tradable patterns along the way. For patterns, we can use flags and pennants, which are short-term bullish continuation patterns. Most recently, CIBR broke out of a pennant in mid January and this foreshadowed the run to new highs. We highlighted this pattern in our Chart Trader report as it took shape in mid January.

Chartists can also use indicators to identify tradable pullbacks within a strong uptrend. The bottom window shows Percent-B, which dips below 0 when the close is below the lower Bollinger Band (20,2). This is a “true” oversold condition because price is more than two standard deviations below the 20-day SMA. Percent-B, however, did not dip below zero and become truly oversold. Instead, it became moderately oversold with dips below .20 on December 31st and January 13th. We have to take what the market gives us. This moderately oversold condition coincided with the flag and pennant patterns.  

This week at TrendInvestorPro we analyzed three AI ETFs that cover three distinct areas (AI infrastructure, physical AI, AI software and apps). Our reports and video also highlighted leadership in ETFs related to Cloud Computing and Software, as well as the recent breakout in the Biotech ETF. Click here to learn more and gain immediate access. 

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Technology moves back into top-5

As we wrap up another trading week, a notable shift has occurred in the sector rankings.

The technology sector, after a brief hiatus, has clawed its way back into the top 5, pushing energy down to the 7th position. This reshuffle reflects the dynamic nature of market rotations and sets the stage for potential shifts in investment focus.

The New Sector Lineup

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

The top-4 and bottom-4 positions did not change. The weakness of the Energy sector has caused Technology to move up and into the top-5 and Utilities to take the number 6 spot.

Weekly RRG

On the weekly Relative Rotation Graph (RRG), XLY maintains its position in the leading quadrant with the highest RS ratio, despite some loss in relative momentum.

XLC, at #3, has halted its momentum loss and shows a slight move to the right picking up relative strength again.

XLF (#2) is rotating through the weakening quadrant but still has the potential to turn around.

XLI (#4) displays a weak tail, pushing into the lagging quadrant, but still outperforms others in that space.

XLK (#5) remains in the improving quadrant, heading towards leading, a promising trajectory.

Daily RRG

Shifting to the daily RRG, we see some variations that support longer-term trends:

XLY is rapidly moving back towards leading through the improving quadrant, reinforcing its weekly strength.

XLF is losing some relative momentum but remains within the leading quadrant.

XLC shows a strong trajectory back into leading, aligning with its weekly rotation.

XLI remains in leading but is shedding some relative momentum.

XLK, while in the lagging quadrant, is starting to curl upwards, bringing its daily tail in-line with the weekly rotation towards the leading quadrant.

Consumer Discretionary (XLY)

XLY is holding up remarkably well, establishing a new higher low of around $218 — a key support level.

Price action suggests a move toward the previous high of $240. Relative strength lines maintain a positive position, underscoring the sector’s dominance.

Financials (XLF)

The financials sector pushed to a new high this week, confirming its bullish condition.

A higher low is clearly in place, and the relative strength chart has bottomed out against former resistance. This setup suggests the RRG lines may turn up soon, imho.

Communication Services (XLC)

XLC is following through nicely after breaking out of a flag-like consolidation pattern.

The sector is now pushing to new highs, dragging relative strength and RRG lines higher and is maintaining a strong rhythm of higher highs and higher lows — a textbook uptrend.

Industrials (XLI)

While XLI remains within its rising channel and has moved away from support, its relative strength is less convincing — neutral at best.

However, compared to other sectors, it’s in a relatively good position despite declining RRG lines.

Technology (XLK)

The “new kid on the block” in the top 5, XLK is still capped under the $240 resistance level within its rising channel.

Its relative strength line is range-bound and moving towards the lower boundary. RRG lines are slowly picking up.

XLK’s position inside the top 5 seems more due to weakness in other sectors than its strength.

Portfolio Performance

The RRGV 1 portfolio ends the week with a 3.96% gain, outperforming the S&P 500’s 3.4% — an impressive 50 basis points of alpha.

I’ll be updating the portfolio on Monday morning, switching out energy for technology based on opening prices.

Summary

While technology has reclaimed its top 5 spot, it’s crucial to recognize that this is partly due to weakness in other sectors rather than overwhelming tech strength.

However, as the largest sector, XLK can significantly impact overall portfolio performance. Investors should watch for a potential breakout above $240, signaling further upside.

#StayAlert and have a great weekend. –Julius

As the FOMC prepared to announce its rate decision on Wednesday, the Financial Select Sector SPDR Fund (XLF), which had been steadily climbing since the end of 2023, was approaching a new record high. Moreover, the Fed’s decision held little surprise — its stance had been well-telegraphed in the weeks leading up to the announcement. Wall Street widely expected rates to remain unchanged.

Yet, as Jerome Powell spoke following the FOMC decision, XLF and the rest of the stock market declined. At the end of the day, XLF notched a gain, but one that barely scratched above its opening price.

In after-hours trading the next day, XLF quietly broke into all-time high territory, surpassing $51.40. Some investors might be asking whether they should have bought XLF at the breakout. To answer that, let’s start with a weekly chart to gain a broader perspective on XLF’s trajectory.

FIGURE 1. WEEKLY CHART OF XLF.  Note how XLF has been trending steadily since late 2023. Chart source: StockCharts.com. For educational purposes.

XLF remained rangebound between just under $29 and $36 for almost a year and a half. During that period, it experienced two failed breakout attempts to the upside, followed by a lackluster retest. By the time XLF cleared the upper levels of the trading range (see blue dotted lines),  more than 90% of S&P financial stocks were trading above their 200-period exponential moving average, as seen by the indicator in the bottom panel.

Let’s pause for a moment and discuss this indicator, which you can add this to your indicator window by selecting Price and typing in (!GT200XLF). This is a useful breadth indicator that tells you the percentage of stocks above a given moving average — in this case, the 200-period EMA. With more than 90% of S&P financial stocks trading above the 200-period EMA, the signal indicated a bullish level of internal strength that might have supported the case for buying the breakout when it finally occurred (see magenta rectangle).

Backup — Let’s Break Down XLF: The financial sector includes several industries. Since we’re discussing XLF, it’s important to mention that over 96% of the ETF is comprised of Financial Services, with the largest weighting going to bank stocks.

XLF rallied from the end of 2023 to the last months of 2024. After a brief pullback in the last two months of the year, XLF resumed its climb to its current levels.

Now let’s shift over to a daily chart.

FIGURE 2. DAILY CHART OF XLF. Will the index pull back or continue advancing into record-high territory?Chart source: StockCharts.com. For educational purposes.

XLF’s technical strength has been net bullish over the entire period represented on the chart, as seen by the StockCharts Technical Rank (SCTR) reading displayed in the top panel.

The Money Flow Index (MFI), which considers momentum and volume, indicates that buying pressure is steady while remaining below overbought conditions. This signals that XLF is not topping out. However, the candles over the last few sessions also show that conviction on either side of the fence, bullish or bearish, remains low. There’s a possibility of a stall or pullback, and if either materializes, you can expect a reversion to the middle Bollinger Band, which might also serve as a sound entry point should the fundamental context remain favorable (note how the price action over the last six months seems to have responded well to Bollinger Band levels).

At the Close

Add XLF to your ChartLists and watch the levels discussed above. If you somehow bought the initial breakout, which didn’t show much bullish conviction, look to the middle Bollinger Band as a potential support level. A close below $47, the most recent swing low, would invalidate the current rally.

Gold stocks have risen, even after the Federal Reserve decided to keep interest rates unchanged. So it wasn’t surprising to find a few gold mining stocks filtered in my StockCharts Technical Rank (SCTR) scan. (This scan was created using StockCharts’ Advanced Scan Workbench and can be found at the end of the article for reference.)

I selected Alamos Gold, Inc. (AGI), a gold mining stock in the materials sector for further analysis. Gold mining stocks have been rising, as have gold prices, and, with AGI trading at around $21, the stock is worth considering as an addition to a portfolio. 

A Deep Dive Into Alamos Gold

AGI has had an interesting run since late 2022, after it broke out of a shallow downward-sloping sideways range. The stock rode higher, moved sideways for almost a year, and then continued its upward trend. It pulled back again from late October 2024 to January 2025; it is now trading above its 21-week exponential moving average (EMA) and challenging its all-time highs.

FIGURE 1. WEEKLY CHART OF GOLD MINING STOCK ALAMOS. The stock has been trending higher since early 2024 and is now battling with its all-time highs.Chart source: StockCharts.com. For educational purposes.

When a stock reaches its all-time high, that could be an incentive to go even higher. But there needs to be momentum. There are a handful of momentum indicators you could use, such as the relative strength index (RSI), moving average convergence/divergence (MACD), and average directional index (ADX).

Let’s look at the daily chart of AGI to identify potential entry points.

FIGURE 2. DAILY CHART OF ALAMOS GOLD. The SCTR score is 82.50, the price is very close to its 52-week high (in this case, an all-time high), and RSI is almost 70. The stock is also trading well above its 15-day EMA.Chart source: StockChartsACP. For educational purposes.

The Distance to 52-Week Highs indicator in the lower panel shows AGI is close to its 52-week high. The SCTR score is above 80, volume is picking up, the stock is trading above its 15-day EMA, and the RSI has been trending higher, just shy of 70. All indicators point to AGI retaining its bullish move.

AGI failed to close at a new all-time high on Thursday. It’s worth monitoring the stock’s momentum to see if it can close at a new high and push through it. If not, consider catching it on a pullback and trying to ride the wave up. It could be a golden opportunity.

However, as we know too well, things can change. If the dynamics of AGI start shifting — i.e. the SCTR score falls, the stock price moves closer to its 15-day EMA, or the RSI reverses and approaches the 50 line — then it may be time to exit the stock.

As always, if any of the indicators start reversing, which would suggest that the stock’s strength is declining, you may be better off moving on to find more promising investments.

The SCTR Scan

[country is US] and [sma(20,volume) > 100000] and [[SCTR.us.etf x 76] or [SCTR.large x 76] or [SCTR.us.etf x 78] or [SCTR.large x 78] or [SCTR.us.etf x 80] or [SCTR.large x 80]]

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

In this exclusive StockCharts video, Joe shares the details of his favorite MACD setup. Joe then covers NVDA, and cryptocurrencies, before covering which Quantum Computing stocks look the best right now, including IONQ and RGTI. Finally, he goes through the symbol requests that came through this week, including AAPL, COIN, and more.

This video was originally published on January 29, 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.