Our short- to intermediate-term technical outlook mostly paints a positive picture for the major indices. When we look at the S&P 500 (SPX), the indicators such as the five-day/13-day and eight-day/21-day exponential moving average (EMA) crossovers signal a bullish trend. Both the Vortex Indicator and the 21-day rate-of-change (ROC) are positioned favorably as well. Meanwhile, the Chande Trend Meter (CTM) is showing some improvement, albeit remaining slightly above neutral. The daily momentum continues to hold steady in bullish territory, and the recent pullback hasn’t inflicted any significant harm on the charts.
When we delve into market breadth for the SPX, things are either flat or leaning slightly positive. Currently, about 59% of the stocks in the index trade above their 200-day average, and the bullish percent index is reading at 55%. If we turn our attention to the S&P 100 (OEX), a more favorable 66% of the stocks are above their 200-day threshold, while the Nasdaq 100 reports a 62% figure. Since late September, these measures have been on the decline, so it would be reassuring to see some upward movement as we progress further into 2025.
The stock market has shown resilience, weathering numerous troubling news events. Yet, as we saw with last Friday’s price action, there’s a persistent undercurrent of concern that can surface swiftly. Although the DeepSeek AI situation feels like it’s behind us, the debate surrounding tariffs continues to spark discussions. These factors underline the need to stay vigilant amidst the ever-changing market dynamics.
