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The Fed Is Getting It Wrong AGAIN As They Hold Rates Steady
June 19, 2025 at 06:00 AM
Tom Bowley
Chief Market Strategist, EarningsBeats.com
https://stockcharts.com/articles/tradingplaces/2025/06/the-fed-is-getting-it-wrong-ag-616.html
The Fed should absolutely stop talking about being "data dependent". That's so far from the truth. If they were data dependent, we'd have either seen a rate cut today or Fed Chief Powell would have been discussing one for the next meeting. Inflation reports since the last Fed meeting have been benign. Economic reports, on the other hand, have shown weakness and are pointing to the need for lower interest rates.
Powell was having none of it. During Wednesday's press conference, one reporter asked the Fed Chief why the Fed was able to lower rates in December, despite knowing that tariffs and their potential impacts were on the way. I thought it was a great question, because Powell was using future tariff impacts on inflation as the primary reason for holding rates steady today. It was a perfect illustration of The Waffler at his best. When another reporter asked Powell about his frequent comments that the Fed is data dependent and that all current data points to the need for an interest rate cut, The Waffler noted the Fed needs to "look ahead". So which is it? Is interest rate policy being guided by current data or by looking ahead?
This is a repeat of 2021 and 2022. Remember all the inflation news and how The Waffler said inflation was transitory. I guess he was looking ahead when he made those comments. He and his band of wafflers looked ahead and got it wrong. Then, inflation data poured in higher than expected for months and he finally started his data dependency talk.
The Fed has been late to every single party for 7 years now and running. They're running late again. Eventually, Mr. Waffler will get it right and our major indices will all move to all-time highs. For now, though, the reason for any period of consolidation or, worse yet, selling can be laid at the doorstep of none other than The Waffler.
Personally, I'm exhausted by the constant "listen to what I say until I change it" approach to interest rate policy. Yes, we've had a 100-year pandemic and a resulting inflation problem that's been worse than any since the 1970s. We've had two trade wars. I get it. But I firmly believe that the extreme volatility and the four (FOUR!!!!!!!) cyclical bear markets that we've endured since The Waffler became the Fed Chief is, in large part, his fault. He was sworn in on February 5th, 2018 and the stock market has been a roller coaster ever since:
https://d.stockcharts.com/img/articles/2025/06/18/5d6e5656-b4cd-4fa5-8856-84ca8aeaad7a.jpg
Name the last time that the U.S. has seen 4 different cyclical bear markets, all starting from all-time highs, within a 7-year period. Start the Jeopardy music.
His mismanagement of interest rates didn't start with the pandemic. I wrote an article in December 2018, during his first year, saying that his call for two rate hikes in 2019 would never happen. The next interest rate move? A cut several months later in 2019. Here's the article I wrote back then as we bottomed in December 2018:
"How The Grinch Stole Christmas" Featuring Jerome Powell
No one has been wrong more than The Waffler.
Now maybe you're sitting back and saying, "Tom, what's the big deal? The tariffs are a threat. Why not just wait it out and be sure there are no lingering inflationary pressures?" Well, if you don't mind the potential of a 5th cyclical bear market before we finally boot this guy to the curb, then I say GO FOR IT. Why try to hasten an economic meltdown when it's unnecessary? Who believes anything The Waffler says? He said we were going to get two rate hikes in 2019. We got an interest rate cut instead. He said inflation was transitory in 2021. Then the Fed had to start raising rates at an absurd rate, because inflation skyrocketed and he waited way too long to turn hawkish. The stock market bottomed in June 2022 and was returning back towards all-time highs just prior to his infamous "more pain ahead" speech from Jackson Hole, WY on August 26th, 2022. Subsequent to that speech, the stock market fell precipitously for two months before once again finding a new bottom. That entire selling episode was caused solely by his irresponsible remarks.
And now where are we? Holding rates steady while the European Central Bank (ECB) has cut rates for 8 straight meetings. The Waffler will eventually get it right. Unfortunately, a lot of innocent investors and traders will continue to pay the price - until someone finally shows him the exit.
His term expiration cannot get here soon enough for me. GOOD RIDDANCE MR. WAFFLER!
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Happy trading!
Tom
The stall at old highs is not the best scenario. In fact the longer it can't breakout the more of an ominous sign. I was hoping for a spike move till July 4 but NOW it seems we drop or rather slip/slide till then. Watershed event dead ahead. Like hearing news and refusing to register it. Pandemic? Well, we had the facts, the past performance and the deadly outcome from the start. We simply refused to accept FACTS. TODAY the FED spelled out STAGFLATION and the street shrugged. Trump spelled out World Trade War and we shrugged. The valuations are so outrageous you would have to go back to WW II for comparisons. Debt ot GDP now at 123%. I guess debt is a subject what is of no concern anymore. Wait till rates and prices continue to rise. We would be in a depression long before we hit double digits on inflation. We relied on disinflation for over 40 years. the shock will cause massive defaults.
July 4th. Watch how surprised i get when it starts the fun.
Thanks RCKS..Lot of things to affect the market. Israel and Iran most likely keep a damper on it right now. Maybe Fed speak will spark some kind of move..
"SPX has traded in a circle since last update...."
http://www.pretzelcharts.com/
SPX has traded in a circle since last update, bouncing off dashed red support, then ending up reversing and closing near it again. Which makes this now the THIRD consecutive update where nothing in the outlook has effectively changed. Which makes finding new and interesting things to write about rather challenging.
NYA managed to bounce over the blue line, then ended up back beneath it -- so we'll see if this is a warning to bulls (it may be)… or a red herring (since SPX is the stronger barometer, and it's still holding its key zone):
In conclusion, rather than reprint the exact same series of warning and caveats that I've said in the past two updates, I'd simply refer everyone back to Sunday night's update if you forgot them. Trade safe.
The snap back response and a FED MEETING looming make this a possible spike breakout move. It would have to be with a decision by the FED to CUT rates. I do not see that coming. Stochastic is strong here. Usually, a new wave almost always breaks above the last bear move with decisive reaction. That means NO SALL OUT here.
I see the most likely scenario as a NASDAQ new high with a shallow move up till July 4th. The DOW seems destined to stay behind and never hit new highs. The SPX has a chance to also marginally break out.
BUT without a FED RATE CUT the odds are small it amounts to a big rally before July 4th. The odds will also mount that July 4th will be a spectacular event. The markets will be closed but the futures market will give you a clue how it opens on 7/7/2025.
Cracks Forming -- But Will It Actually Break?
http://www.pretzelcharts.com/
No change since last update, except to note that SPX has reached its first downside target-slash-potential support zone. If it sustains trade below dashed red, then solid red becomes the next target (and sustained trade below solid red would then target ~5767). But lest everyone get too focused on the lower levels -- remember, bears do have to punch through dashed red first.
NYA has fallen through its first support line -- bears need to hold that:
In conclusion, the first crack appeared on June 10, and cracks are continuing to spiderweb across the charts -- we'll see if the glass breaks on bulls or not. But if it does, again, please keep in mind what I discussed last update:
That said, be aware that IF the highly speculative 1?? and 2?? on the near-term SPX chart happen to be unfolding, then these early downside targets might be VERY conservative. Because if this is a second wave decline, then its job would be to convince everyone that the bear market is resuming -- which implies a deep and scary decline, potentially of 500 points or more.
And it also bears mention that SPX did not reclaim its all-time high -- which means that if the decline gets teeth, then it's not outside the realm of possibilities that the bear market IS resuming, so we should be aware of that, as well. But before we even consider going there, let's see how bears handle these potential support zones first.
Trade safe.
I NOW see a failed breakout. The insanity that is going on unchecked and unconcerned is alarming by itself. The combined affront from world animosity and paid privilege to do business here to authoritarian regime escalation. We sit by watching it unfold like a reality TV show, detached and unaffected. The MARKET can't hold together much longer. they can focus on the deregulation, tax cuts, unchecked greed and criminal behavior to advance profits. They can persuade themselves TRUMP will bring in a new era of economic prosperity. Unfortunately, the laws of physics have not changed. It will bring this all crashing down.
WHEN? The ONLY question needed. I actually think it has started. I will be more comfortable making this statement after July 4th. TRUMP has accelerated the process on all fronts. Political, economic, social. A man that gets more frustrated the more he is allowed to destroy. As if each and every process never satisfies him and thinks pushing it further will. An addict out of control. The more he gets the more he needs.
WW III or Civil War. That is our fate. No ifs ands or buts. No one willing to stop him. Insurrection Act will stop elections and mid-terms are never going to be seen. This of course assumes he knows his party will lose.
Market timing: We should slip/slide between now and July 4th. I do NOT see new highs in the three indices. If we do succeed in breaking out, I will have to reassess my assumptions.
Trump’s Fort Bragg speech was a serious step toward ending democracy - an article not written by me. Golly, there are people out there tht are as insane as i am.
Less than five months into his second term, Trump has gone much further to challenge the traditional separation of the military from partisan politics. This time, he chose an unqualified Fox News host to be defense secretary to ensure he would not face the resistance he met from Mattis and Esper. Then he fired multiple senior leaders of the military for being, well, Black or female. Just in the past few days, Trump deployed the Marines to Los Angeles in response to anti-ICE protests, even though there was no need for that escalation.
Then on Tuesday, Trump gave a virulently partisan speech at Fort Bragg, during which he egged on the troops to boo the Democrats serving as mayor of Los Angeles and governor of California. This speech, by itself, is incredibly damaging, as it projects the image of the military siding with the president against his political foes.
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He has setup the military as dedicated brute force against TRUMPs foes. Hired only loyalists at top level. But hey i must be losing it. Clearly this article is pure fiction. In 5 months' time. Simply amazing.
MARKET needs to break out and fast. Today or tomorrow. New highs spells accelerated move up from here. WHY? To keep the same trajectory seen from April 7th low. I actually see the possibility of 6666 on SPX by July 4th. If that were to happen WATCH OUT BELOW!
"The market has, of course, continued to drift higher, like a balloon filled with lukewarm air."
http://www.pretzelcharts.com/
Last update prompted an angry letter from Jerome "the Gnome" Powell, which I will reprint here in its entirety [sic]:
Dear Mister Pretzel Logic,
I sawed ewe said a thing about me. Its KNOT TREW! Stop spredding lyes or eye'll be forced to SEW you!
Jerome Powell
Chairmen of the Fed Earl Rezerve
p.s.- STOP CALLING ME "THE NOME"!!111
Of course, it's never the intention of these updates to foster ill feelings among our feckless fearless leaders, so in the interest of goodwill, my lawyers have reached out to Jerome "the Gnome." Hopefully we can get things patched up, which Jerome can do while he's sewing.
The market has, of course, continued to drift higher, like a balloon filled with lukewarm air. But hey, NYA's chart is of at least minor note -- which is something, anyway:
COMPQ, INDU, and SPX all display near-term patterns that are similar to the rising wedge on NYA -- so it's worth keeping an eye on -- especially since SPX is still bouncing along the underside of the generational black trend line:
Near-term, the black trendline is still the first to watch -- but now, the UPPER red trend line (dashed) could act as first support, so bears would have to whipsaw that (even if black fails) before they'd have a shot at the solid red trendline:
First support is a little easier to see on the near-term chart:
In conclusion, multiple markets have formed apparent "rising wedges" -- but these patterns are not always bearish and can instead suggest a new (minor) launch pad... so we need to keep an eye on the support zones for further clues. Trade safe.
Hegseth tells Congress his ‘war fighters’ are primed for ‘lethality’ ... as he sends them to face American protesters
I guess I must have read this article wrong. Let me check. Nope. I assume the 40plus % of TRUMP voters are ravenous for such action. Now had i stated the very words out of the Defense Secretary's mouth I would be cast as a lunatic. Since HE states it to the American People, he is a HERO himself. See how easy it is to become a fanatic.
Like the old EF Hutton commercials. The people LISTEN to TRUMP and cling to every word like an evangelic hearing the voice of GOD.
Thanks RCKS... My 2 big guru's I read are both looking for more up yet. Possibly new highs.. They really do not have a lot to say except lots of outs..::)
"........SPX remains in its intermediate uptrend for now, so not much else to add........"
http://www.pretzelcharts.com/
The market has continued to generally bore everyone to death, leaving me forced to write about unsubstantiated rumors regarding Jerome "the Gnome" Powell. Who, according to Sources Familiar With the Matter™, is soon almost certainly going to be stepping down... a flight of stairs. The internet is abuzz with this rumor. Can Powell handle stairs? Will he use the handrail? How many stairs in all? Everyone has an opinion. But Experts on Jerome Powell dismiss this as wishful thinking.
"Jerome Powell hates stairs," one Expert with a PhD in Powell opined, "He'll almost certainly use the elevator."
We'll keep a close eye on this story going forward. Unless I forget, which is likely.
Market-wise, not a lot has happened since the last time we looked at it. Friday traded in a range. I did spot one "possible curveball" -- but it's just a potential, there's not really anything concrete suggesting this will happen. So this is designed to arm readers with this knowledge, in case the market drops on Monday:
Intermediate term, SPX is still holding all its trend lines:
And NYA has now officially captured its next target and potential resistance zone:
In conclusion, SPX remains in its intermediate uptrend for now, so not much else to add. As I've noted several times: The black trendlines on both SPX charts are the first thing to watch for any signs of possible weakness. Trade safe.
Stock Market Commentary 06/06/25
By Lawrence G. McMillan
The downtrend line connecting the February and May highs was a major impediment on the upside, and now $SPX has overcome that. For the previous three days, $SPX has traded above that downtrend line, probing up towards 6000. But each day's close has seen the Index slip back. Today, a strong reaction to the Unemployment Report, has seen $SPX trade up to new relative highs. If it can hold this level today, above 6000, new highs should be the next stop.
Those all-time highs are at 6150, so that is resistance for now. There should be support just above 5900, and at the next two gaps (5840 and 5700). A move below 5700 would be very bearish, but I don't expect to see that in the near-term.
Despite the improvement in the $SPX chart, there are still some mixed signals amongst our indicators.
On the positive side of the ledger, the equity-only put- call ratios continue to decline. Thus, they remain on buy signals for the stock market.
Market breadth has not been able to expand. The NYSE-based breadth oscillator has steadfastly remained on a sell signal all week, although the "stocks only" oscillator did move above +200 for two days before falling back again.
$VIX itself has continued to decline, and that is perhaps having some important consequences. First of all, the "spike peak" buy signal of May 23rd remains intact. That buy signal will remain in effect for 22 trading days, unless stopped out by $VIX re-entering "spiking mode." And now currently, there is a new trend of $VIX signal in place.
Overall, things continue to improve, as a majority of our indicators -- but not all -- are bullish. A move above 6150 would be very positive, of course. In any case, we will trade individual signals as they occur, and we will continue to roll deeply in-the- money options.
https://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1749402354569
https://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1749402354569
https://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1749402354569
https://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1749402354569
Big Rally Ahead Should Yield All-Time High on This Index
June 06, 2025 at 01:42 PM
Tom Bowley
Chief Market Strategist, EarningsBeats.com
https://stockcharts.com/articles/tradingplaces/2025/06/big-rally-ahead-should-yield-a-383.html
All of our major indices continue to rally off the April 7th, cyclical bear market low. A couple, however, have broken out of key bullish continuation patterns that measure to all-time highs. I'll focus on one in today's article.
Russell 2000
The IWM is an ETF that tracks the small-cap Russell 2000 and it's chart couldn't be much more bullish right now. After setting an all-time high on November 25, 2024 at 243.71, the IWM fell into its own cyclical bear market, dropping to a low of 171.73 on April 7th. That represented a drop of 71.98 points, or 29.54%, well beyond the 20% cyclical bear market threshold. A bottoming reverse head & shoulders pattern formed and I've been awaiting for a breakout above neckline resistance at 211. We saw that on today's open after nonfarm payrolls highlighted our somewhat resilient economy as jobs came in ahead of expectations and the unemployment rate held steady. Check out this chart on the IWM:
https://d.stockcharts.com/img/articles/2025/06/06/ab9e7513-efb5-4282-9f42-2706810cad90.jpg
I'm not saying that we'll see a straight up move to 249, and short-term direction could be impacted by how we finish today. A weak afternoon could lead to further short-term selling, possibly back to the rising 20-day EMA. But, ultimately, and during 2025, I'm looking for that all-time high. A strong finish this afternoon and close on or near the daily high would add more bullishness to this chart.
Leading Stocks in Leading Industry Groups
The small cap IWM is no different than any of our other major indices, like the S&P 500 and NASDAQ 100. When you see an index breakout, you need to look to the leading stocks in that area in order to outperform the benchmark index. We started our Leading Stocks ChartList (LSCL) two weeks ago and the results have been absolutely phenomenal so far, which I would expect them to be. After last week, we produced our 2nd weekly LSCL and the results have been awesome once again. There were 43 stocks included and 32 of the 43 have outperformed the S&P 500 this week. That's similar results to our first weekly LSCL.
Individual stock leaders from our LSCL included the following big winners as of 1pm ET today:
PRCH: +16.89%
DOMO: +15.75%
LASR: +15.40%
HOOD: +15.10%
QBTS: +13.17%
TTMI: +11.62%
ZS: +10.76%
These are exceptional returns when you consider the benchmark S&P 500 gained just 1.38% this week.
I want to provide all of our followers a SPECIAL OFFER to join our FREE EB Digest newsletter. Subscribe HERE with only your name and email address (no credit card required), and we'll provide you a link and password to download this unique Leading Stocks ChartList (LSCL) and check it out for yourself. You need to be an Extra or Pro member at StockCharts in order to download the ChartList into your account. Basic members and non-members can view the ChartList and check out the stocks we include for next week.
Happy trading!
Tom
"The black trendlines on both SPX charts are the first thing to watch for any signs of possible weakness."
http://www.pretzelcharts.com/
Yesterday, SPX dropped down to test the black trendline that I highlighted on Wednesday:
It also tested the larger black channel:
Finally, NYA has rallied to its next upside target -- which also happens to be the final resistance zone:
In conclusion, no real change from last update, because all we've seen since is additional confirmation of what I wrote then: The black trendlines on both SPX charts are the first thing to watch for any signs of possible weakness. Trade safe.
"........north of 5969 invalidates any hope of that last decline being an impulse.... No Country for Bears"
http://www.pretzelcharts.com/
A week ago, I noted that
On the one hand, bears didn't damage the uptrend even a little, so from a technical standpoint, bulls still have the ball. On the other hand, the potential impulse down does give bears the best shot they've had all month. And again, north of 5969 invalidates any hope of that last decline being an impulse.
But as has been its way for the past few weeks, the market wasn't interested in entertaining even the slightest bearish notions. Probably the first key line (from a near-term perspective) to watch now is the solid black line.
In conclusion, this is the type of market where -- if you're a bear -- you just keep watching the trendlines (black on both charts) and waiting for the next "best shot." Trade safe.
I have a confirming reversal setup. The candlestick patterns on May 28th were very bearish for SP500 and Nasdaq. YESTERDAY we got the complete opposite candlestick reading. This is on the Daily and Weekly charts. Not seen this event happen so close to one another. It suggests we could indeed see one more spike move. Analysts are all over themselves declaring, no boasting, that they see 6500 plus for SP500 before the years is out. In unison it seems. I guess something triggered their call and they all must be using the same readings.
Now all TRUMP has to do is stay quiet. No mention of Tariffs. if that can be achieved, we could see the 6666 on SPX by Independence Day. A long shot but one I hope we meet. This reminds me of the unanimous thought on a 100-year event called the Pandemic. We ignored the obvious conclusion for 5 weeks. To think that a TRUMP announcement on July 4th, or on the actual 90-day deadline July 9th, would have no effect on a rip-roaring high-flying stock market is yet another example of human emotions in the stone age compared to scientific achievements.
I am counting on this genetic blunder.
Market-wise, we're still basically in the same place we were on Friday: Bulls need to hold 5843
http://www.pretzelcharts.com/
Here's a chart that made the rounds this weekend that I found interesting. For decades, corporate profits made up about 6% of GDP. That was the norm -- a stable share of the economic pie.
Then something broke.
Briefly in the mid aughts, and then again near the launch of the first QE programs, corporate profits surged to 10–12% of GDP and stayed there. That’s not a blip. That’s a sea change.
But here’s the catch: profits don’t rise in a vacuum. If corporations are getting more, someone else is getting less -- usually labor, small business, or the public sector.
So what looks like success is really imbalance.
Cheap debt, globalization, tax loopholes, financialization -- they’ve all propped up margins. But this isn’t just about business thriving. It’s about extraction replacing productivity.
If 6% was the long-term mean, and we’re now at 12%, then either we’ve built a new normal on systemic distortion… or we’re headed for a brutal mean reversion.
What this chart really shows isn’t health. It’s dependency. We've built an entire asset ecosystem, a political cycle, and a fiscal regime on the back of profit levels that may not be sustainable. And if indeed they’re not -- if they even begin to revert -- the ripple effects could be massive.
This kind of chart that tells you the system is unbalanced. And that stocks are priced for perfection based on a profit regime that may not hold.
In short, this isn’t a chart of prosperity. It’s a canary in the coal mine. And it’s been dead for years -- but we’ve hooked it up to an air compressor and have convinced ourselves it’s whistling Dixie.
Worth keeping in the back of one's mind as another suggestion that even though bears have taken a lot of beatings in these intervening years of imbalance... things won't stay that way forever.
Market-wise, we're still basically in the same place we were on Friday:
Not much else to add to the past couple updates. Trade safe.
I am surprise you still can't see just who or what TRUMP is. You call me irrational but i am not cheering on a rapist, seditionist, extortionist and a man determined to hang his 2nd in command. I am not a man that uses his powers for vengeance and then tells the world exactly why he is doing it. And the public stop listening or pretend it is normal. History will be so shameful i can guarantee most voters will never admit to voting for him or supporting him. His outcome is a given. he can't help himself. We can't stop from covering our eyes and ears Every single day his behavior is more bizarre and dangerous. Boggles the mind how much criminal activity he does in the open how much cruelty how much disbanding the constitution how much his vengeance is displayed how much dictatorial control he gets.
But hey it must be ME that is confused. I never knew the world seeks a man with these attributes. me, i foolishly see them as atrocities. I got the same message at the start of a Pandemic with known consequences in health and stock market. i was told I was being pessimistic instead of realistic. Here we go again.
Stock Market Commentary 05/30/25
By Lawrence G. McMillan
Last weekend, tariffs against Europe were postponed, and the stock market took that as a very favorable sign. When traders returned after the Memorial Day weekend, $SPX gapped higher on what turned out to be a very strong day for the big-cap stocks. The gap from that day extends down to 5830, and it would probably be a positive thing if that were filled. A move below 5700 would be negative. There is resistance at last week's highs near 5970 and also at the all-time highs of 6150.
Equity-only put-call ratios continue to decline, so these remain as bullish signals for the stock market. These ratios are beginning to reach the lower regions of their charts (Figures 2 and 3), but that is only an overbought condition and is by no means a sell signal. Breadth has been in a fairly negative mode for the last couple of weeks. That had produced sell signals from our breadth oscillators, and they remain bearish today.
$VIX shot up to 25.53 last Friday (May 23rd) when the stock market opened sharply lower. $VIX then proceeded to retreat sharply that day, and by the end of the day had closed more than 3.00 points below that high. Thus a new "spike peak" buy signal was registered.
So, we have a generally mixed picture, with a slight weight of the evidence to the bullish side: Regardless, we will continue to trade confirmed signals as they appear. Roll deeply in-the-money positions to take partial profits and reduce risk of a reversal.
https://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1748623028980
https://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1748623028980
https://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1748623028980
https://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1748623028980
"So technically the uptrend is still intact and doing just fine -- for now....." ".....from a technical standpoint, bulls still have the ball....."
http://www.pretzelcharts.com/
Since last update, SPX has traded in a tight range, making today's update largely into a "no change" update. Since I hate repeating myself repeating myself, I'm just going to quote last update directly, to save people from needing to reopen it:
Last update contained a lot of warnings for bulls, then concluded with:
The first warning for bulls would be sustained trade south of the black channel (noted on Wednesday as the first downside target). If that channel holds, then no harm, no foul.
As those of you who own theodolites have no doubt already realized, SPX then bounced right at the black channel:
So technically the uptrend is still intact and doing just fine -- for now. That said, the decline looks enough like an impulse that it's worth being very cautious here if you're a bull. The chart below shows what might happen if this is a bear move within a larger bull wave. If this is the start of a larger bear wave, then "look out below" -- so things could get much worse than this. And we're not far from the invalidation level (5969) for bearish things, so...
Then there was this chart, which has been updated with the new price action, though it's almost impossible to tell:
And it concluded with:
In conclusion, on the one hand, bears didn't damage the uptrend even a little, so from a technical standpoint, bulls still have the ball. On the other hand, the potential impulse down does give bears the best shot they've had all month. And again, north of 5969 invalidates any hope of that last decline being an impulse. Trade safe.
I'm surprised you are still a free man
".....on the one hand, bears didn't damage the uptrend even a little, so from a technical standpoint, bulls still have the ball. On the other hand, the potential impulse down does give bears the best shot they've had all month. And again, north of 5969 invalidates any hope of that last decline being an impulse."
http://www.pretzelcharts.com/
Last update contained a lot of warnings for bulls, then concluded with:
The first warning for bulls would be sustained trade south of the black channel (noted on Wednesday as the first downside target). If that channel holds, then no harm, no foul.
As those of you who own theodolites have no doubt already realized, SPX then bounced right at the black channel:
So technically the uptrend is still intact and doing just fine -- for now. That said, the decline looks enough like an impulse that it's worth being very cautious here if you're a bull. The chart below shows what might happen if this is a bear move within a larger bull wave. If this is the start of a larger bear wave, then "look out below" -- so things could get much worse than this. And we're not far from the invalidation level (5969) for bearish things, so...
In conclusion, on the one hand, bears didn't damage the uptrend even a little, so from a technical standpoint, bulls still have the ball. On the other hand, the potential impulse down does give bears the best shot they've had all month. And again, north of 5969 invalidates any hope of that last decline being an impulse. Trade safe.
Early Memorial Day 2025, President Donald Trump used his Truth Social platform to post a rambling diatribe.
Trump, writing in all caps, posted, "HAPPY MEMORIAL DAY TO ALL, INCLUDING THE SCUM THAT SPENT THE LAST FOUR YEARS TRYING TO DESTROY OUR COUNTRY THROUGH WARPED RADICAL LEFT MINDS, WHO ALLOWED 21,000,000 MILLION PEOPLE TO ILLEGALLY ENTER OUR COUNTRY, MANY OF THE BEING CRIMINALS AND THE MENTAO INSANE,THROUGH AN OPEN BORDER THAT ONLY AN INCOMPETENT PRESIDENT WOULD APPROVE, AND THROUGH JUDGES WHO ARE ON A MISSION TO KEEP MURDERERS, DRUG DEALERS, RAPISTS, GANG MEMBERS, AND RELEASED PRISONERS FROM ALL OVER THE WORLD, IN OUR COUNTRY SO THEY CAN ROB, MURDERERS, AND RAPE AGAIN, PROTECTED BY THESE USA HATING JUDGES WHO SUFFER FROM AN IDEOLOGY THAT IS SICK, AND VERY DANGEROUS FOR OUR COUNTRY. HOPEFULLY THE UNITED STATES SUPREME COURT, AND OTHER GOOD AND COMPASSIONATE JUDGES THROUGHOUT THE LAND, WILL SAVE US FROM THE DECISIONS OF THE MONSTERS WHO WANT OUR COUNTRY TO GO TO HELL."
But Trump, according to Mediaite, later deleted that post and replaced it with a much shorter post that read simply, "HAPPY MEMORIAL DAY!
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He agreed to extend my ass. He agreed to stay with his own pledge. JUKLY 9 but more likely he showers us with his hate warped sense of freedom on July 4th. LIKE I SAID! We are in the same period as we were in the first few weeks of a known Pandemic. We pretended it didn't exist, nor will it impact us. This time around you only need to decide when the street gest the cold water splashed on the face. The ONE DEATH on US soil moment. How many times do we have to jump every time the puppet master pulls the strings. I suspect the bond market will continue to break out, the JUNE economic news starts to show a spike in inflation and weakness in retail.
What we have folks is a guaranteed crash. One that is swift or drawn out. You be the judge. What you also have is no ability to see anything near these current prices for a long time to come. But hey I guess we are in a new paradigm where tariffs are good for us.
Wednesday's May 21, 2025 Update:
".....mainly I just wanted everyone to remember that there are no guarantees in the market and retests of all-time highs sometimes fail -- so we should all stay on our toes here."
http://www.pretzelcharts.com/
Let's simplify things in this update. While many markets LOOK like they could stand another wave up, the simple observation is: We are retesting a major resistance zone (the all-time high).
And, again, keeping things as simple as possible: Anytime you have a major retest like this, there is a chance the market won't break through.
So, what I'm saying is: Looks can sometimes be deceiving -- especially in financial markets -- so this would not be a good place for bulls to get complacent.
A chart worth paying attention to is COMPQ, because it has done the bare minimum needed to complete its pattern. Now again, it would LOOK a little better with another wave up. But let's not put all our eggs in that basket, lest it get tossed off a roof by a late-lingering Easter Bunny who suddenly realizes that bunnies don't LAY eggs and the entire holiday tradition makes no sense.
Next is SPX -- which is considering whipsawing its last breakout. Recall that whipsaws (were that to occur) can lead to strong moves in the opposite direction.
So that's it for today... mainly I just wanted everyone to remember that there are no guarantees in the market and retests of all-time highs sometimes fail -- so we should all stay on our toes here. Trade safe.
"....it's worth mentioning that if the bull count is active, this decline could either fit as a fourth or a second wave (at higher degree). But in this market, given the massive downside potential, bulls might now want to await CLEAR signs of a bottom (impulsive rallies, etc.) before jumping back in...."
http://www.pretzelcharts.com/
The entire function of Wednesday's update was to deliver a series of warnings to bulls, noting:
1. COMPQ had done enough for a complete rally
2. The rally could die at current levels, given the proximity to the all-time-high, and
3. that if SPX whipsawed its last breakout, it could suggest "a strong move in the opposite direction."
Last update was a case of "something bothering me" in the charts, but we didn't have any clear impulsive declines to call out, so I couldn't point to any form of proof for readers... but the instinct was strong enough that it led to an update that was basically nothing but warnings, even down to the final conclusion.
Sometimes that's the best I can do: Convey my intuition -- though intuitions are often, by nature, a little vague. Hopefully, given that it was paired with "watch these specific signals" warnings (COMPQ, SPX), it was helpful.
With COMPQ, I've been warning for a week that it had stalled at blue and hence might retest black from above -- so, while not "proof" of a pending reversal, this was nonetheless specific in detail.
SPX provided the cleanest signal, and its whipsaw of the red breakout was the main actionable tell:
I also dug a decade-old chart out of mothballs, because it's interesting here:
In conclusion, it's worth mentioning that if the bull count is active, this decline could either fit as a fourth or a second wave (at higher degree). But in this market, given the massive downside potential, bulls might now want to await CLEAR signs of a bottom (impulsive rallies, etc.) before jumping back in. Because:
Even if this is "just" a second wave -- a second wave could retest the crash low.
A fourth wave wouldn't travel that low, but still has hundreds of points (in SPX) of leeway.
In other words, even the bull counts could be pretty horrifying to attempt to ride out.
And, of course, the bear count breaks the crash low.
So, we're not "writing off the bulls" here -- this could well be a correction to an ongoing rally.
But we also know the downside risk, which is massive -- so we should manage accordingly.
Trade safe.
Wall Street downright giddy. Analysts that is. Not worried about anything. Moddy; s downgrade, Debt to GDP, Tax cuts shifting more to the wealthy, even tariffs. They are praising TRUMP for his economic miracle. I kid you not. One guy actually praised his sons and his business acumen. Marveling at his extraordinary profitable presidency. They see it as business like the 400-million-dollar shiny plane and his personal deals relating to his government contracts. The ease at which we accept evil by rewording and sleight of hand.
Me I am focused on one obsession JULY 4. Now i have my ultimate chart to use as i have in the past. BITCOIN. it shows major reversals clearly and dramatically. My personal possible all-time top for Bitcoin for years has been 120. i never thought it would reach those levels. Now at 111 and could hit any day, week or month. I will be watching this closely. in the past it was the FIRST thing that reversed before the other indices did and fairly quickly after.
So now I have JULY 4 and 120 for Bitcoin.
Interesting juncture. A two day drop and the depth should hold around 5870. If it dops much farther and the move is longer on the downside we have finished these 3 waves move up as opposed to a 5-wave variety. I still think we get sloppy moves from here on out IF we are in only a 3-wave upside move.
I need for the VIX to hold up even if we start sliding. I need for the sloppy behavior to continue till the Trump speech on July 4th. if we are still afloat by then I place my long shot bets.
"....Moody's downgraded the USA's credit rating from AAA to "junk" status (okay, maybe that's an exaggeration)........."
http://www.pretzelcharts.com/
After the close on Friday, Moody's downgraded the USA's credit rating from AAA to "junk" status (okay, maybe that's an exaggeration), causing futures to drop a bit. This isn't the first time a major agency has downgraded US debt (I recall this happening in 2011 as well) -- "the US debt trajectory is unsustainable" is hardly breaking news to anyone.
But it will be interesting to see if this ends up being just a hiccup (probably), or the start of a more significant turn. Note the chart below:
COMPQ is still below its next resistance zone:
Near term -- IF this is a bull wave -- SPX has a couple ways to approach it:
The chart below pairs with the near-term chart above:
In conclusion, this will be an interesting test of bulls' resolve here. Trade safe.
Great news of the 30% tariff on China? The pledge to tariff the world as the market refused to accept reality. The current drive has a very distinct 5 wave well defined move on the weekly chart. So much so that the ending range is here. Doubt we see beyond 6000 on SPX. On a timeline it also should be ending right about now. As for the market ignoring a Pandemic that didn't go well did it. Trade wars never ever ever work out. in fact it produces wars and economic disasters. Trump just announced his pledge to 100 plus nations that tariffs are coming for you. The deals he pretends to make is a simple one If Trump can hold his tongue till July 4th we will see a market that holds up but barely. not likely to see the rally to new highs but that is not off the table. From here till July I expect some sideways to down sliding. Nothing good will be seen from the damage he already caused.
Like an announced Pandemic the market held up till 5 weeks and then one death did it in. Charts here are useless since TRUMP, a man with extreme power, will influence the market greatly. He is adamant and will not weaver. A one-man wrecking machine. Before this year is out one of two things ill happen. Trump gets impeached or he causes a war and martial law. You don't mess with GREED and PROFITS.
Crash scenario is most likely even as it is very rare. The setup is perfect. My only hope is that the VIX tracks downward till July. In my opinion we have another known pandemic and even a timeline when that death occurs. July 4th.
"..It's worth mentioning that there could be enough waves in place for a correction here... but without any impulsive declines yet, please take that with a grain of salt..."
http://www.pretzelcharts.com/
Last update noted that several markets were reaching resistance zones, and though SPX moved a bit higher, that remains true (given that these are "zones" and not exact levels). We can see SPX is still within points of red resistance:
It's worth mentioning that there could be enough waves in place for a correction here... but without any impulsive declines yet, please take that with a grain of salt:
COMPQ also remains in its resistance zone:
In conclusion, not much else to add (to recent updates) beyond that. We'll see if bears can do anything with this opportunity or if it gets squandered. Trade safe.
Stock Market Commentary 05/16/25
By Lawrence G. McMillan
Stocks have continued to rally, after last weekend's positive tariff meeting between the U.S. and China. $SPX gapped higher on Monday, blasting right through former resistance at 5700 and 5800, and thus establishing a new bullish pattern on its chart.
The next resistance area is at the all-time highs of 6150. Yes, it is possible that the Index could falter before reaching 6150, and if it did that, there is still the possibility of a pattern of lower highs on the chart. But we will deal with that if it comes to pass.
There are various support levels below here. They are marked with horizontal red lines on the chart in Figure 1.
For now, this breakout appears to be real and is being accompanied by some buy signals from our internal indicators although not all are on buy signals yet.
Equity-only put-call ratios continue to drop, and that is bullish for stocks. These ratios will only generate sell signals for stocks when they roll over and begin to trend higher.
Breadth continues to be a strength of this market. The breadth oscillators issued buy signals fairly early on (April 23rd) and have remained bullish since then. These oscillators have been in overbought territory for much of that time, but that is a positive thing when $SPX is beginning a new leg upward. It is going to take at least two consecutive days of negative breadth in order to cancel out these buy signals.
$VIX has continued to fall -- although I wouldn't say it has collapsed. Both of the signals that we derive from the $VIX chart have been closed out, so there is no signal associated with $VIX at the current time.
In summary, we had some short-term buy signals a couple of weeks ago ($VIX crossover and "oscillator differential"), and now those have progressed to longer-term buy signals from equity-only, breadth, "$VIX minus HV20," and a more positive $SPX chart. We will follow any new signals that are generated, and we will continue to roll deeply in-the-money options.
https://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1747426369342
https://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1747426369342
https://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1747426369342
https://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1747426369342
".....a number of markets have reached potential resistance zones, so we'll see if there's a pause and/or if bears can get anything going, even near term...."
http://www.pretzelcharts.com/
A number of readers have asked me to update oil, since it performed basically as expected since the last time I updated that chart (a year ago). I've been hesitant because I don't like this pattern one bit... plus I have a ~14-year win streak going on this chart(!) -- and I would hate to mess that up (winks).
So the two main options that jump out in oil are as noted on the chart:
Next, SPX is back to one of its last remaining resistance zones:
COMPQ has also reached its next potential resistance zone:
Big picture, INDU is still performing in line with a pattern we've been tracking for a year and a half now:
In conclusion, a number of markets have reached potential resistance zones, so we'll see if there's a pause and/or if bears can get anything going, even near term. Trade safe.
Thanks RCKS...One guru I read is always talking about how the Pro's take advantage of the poor little guys like us. They can manipulate the market just about anytime they feel like it..But usually not on a massive scale as this..I didn't think there was a way to cheat trading stocks.. I have tried for find a way>>::) But I do not even have any good luck anymore.
Market Maker Manipulation; Oops, They Did It Again!
May 13, 2025 at 06:00 AM
Tom Bowley
Chief Market Strategist, EarningsBeats.com
https://stockcharts.com/articles/tradingplaces/2025/05/market-maker-manipulation-oops-952.html
Let's be honest. Did anyone think a little more than a month ago that the S&P 500 was primed for a 1000-point rebound? I turned bullish at that April 7th bottom a month ago, but I did not see this type of massive recovery so quickly.
Why does this happen?
I believe these panicked selloffs occur, because the big Wall Street firms get out prior to market massacres and they need to get back in. What's the best way to accumulate shares? To send out your best market influencers (oops, I meant analysts) to drive home the pain and misery that's coming. I mean, just ask the media outlets. They were the ones responsible for all those terrorizing headlines. And market makers added panic by opening stocks much, much lower from previous days' closes on many occasions this year.
Want some evidence?
Well, let's go back in time and zero in on the more aggressive QQQ (ETF that tracks the NASDAQ 100):
https://d.stockcharts.com/img/articles/2025/05/12/e05e45c6-0abb-4761-87fb-1bcf9f06b4e1.jpg
At the very bottom, when the most manipulation takes place, we see massive gaps to the downside that create opportunities for Wall Street firms to buy in much, much cheaper as retail traders panic sell into those falling gaps. The massive volume that accompanies capitulation makes it very easy for market makers to buy lots of shares on their own behalf and on behalf of their institutional clients. This institutional buying is reflected by higher prices intraday. Looking at the above chart, the QQQ tumbled 52.46 (476.15-423.69) over 3 trading days. But the total gap downs over those 3 days were 46.26, nearly 90% of the entire 3-day meltdown. This wasn't a distribution period or a selling event, it was a MARKET MAKER MANIPULATION EVENT.
Want an even more telling stat? From the March 13th close (467.64) to the Friday, May 9th close (487.97), the QQQ gained roughly 20 bucks. Here's the breakdown of how the QQQ traded on an intraday basis over this 2-month period:
Opening gaps: -42.31
9:30-10:00: +19.18
10:00-11:00: +6.72
11:00-2:00: +21.86
2:00-4:00: +14.13
During a period when the QQQ gained roughly 20 bucks, the cumulative opening gaps were -42 bucks. That means that the QQQ saw buying to the tune of 62 bucks during the trading day. Panicked retailers took the market makers' bait and sold with all the media-related nonsense, while market makers were secretly buying for all their Wall Street colleagues and buddies.
If you're sitting in cash right now, wondering when to get back in, I can promise you that you're not alone. This 2025 "massacre" and "shocking rebound" were planned all along. Wall Street's rotation into defensive areas of the market had me and many EarningsBeats.com members in cash back in January and early February. They absolutely knew this was coming, but media outlets weren't telling us back then to get out. They waited for the fear to kick in before posting their ridiculously-bearish headlines over and over and over again - forcing retail traders to say "Uncle!!!!!"
This is what I refer to as "legalized thievery." It's how our financial system works unfortunately. You either learn how to play defense against it or periodically suffer the consequences. At EarningsBeats.com, we choose the former.
How To Build A Winning Portfolio
Now that the manipulation is in our rear view mirror and the S&P 500 looks to move back into all-time high territory, it's very important to understand the best way to outperform the benchmark S&P 500. That's what we strive to do over time and we've been very successful at it. This Saturday, May 17th, at 10:00am ET, I'll be hosting a webinar to show you how to successfully build a portfolio that outperforms over time. One part of this webinar will be dedicated to highlighting the keys to spotting the 2025 cyclical bear market and determining the best time frame to jump back in. We've made these calls in real time during 2025, from our MarketVision 2025 event in early January to my Daily Market Reports to EB members to my StockCharts blog articles to my YouTube shows hosted by both EarningsBeats.com and StockCharts.com. It's extremely important that we learn from difficult periods in the stock market so that we're better prepared for the next one.
Don't allow Wall Street to manipulate you. I'm going to show you the best way(s) to avoid it when it occurs again. And it WILL happen again. CLICK HERE to learn more, register for our "How To Build A Winning Portfolio" and save your seat. If you cannot make the event live on Saturday, you'll receive a recording of the event to listen to at your leisure simply by registering. So register NOW!
Happy trading!
Tom
"SPX has not gone bears way and they need to be aware of that. They probably need a reversal fairly soon to keep their near-term (and perhaps even intermediate term) hopes alive."
http://www.pretzelcharts.com/
Last update ended with:
In conclusion, so far, bulls have cleared every level they needed -- which tends to put the burden back onto bears to break those levels, to show they still have remaining firepower.
But things didn't start there -- I've been warning bears for the past two weeks that things weren't looking great for them, once SPX cleared resistance. Going all the way back to April 25, when I wrote:
In conclusion, if bears still have gas in the tank, they probably want to mount a defense of these zones. If they can't, then we should not ignore that
Then on April 28, I wrote:
Since last update, SPX has sneaked over its potential trend resistance lines, so bears have a brief window to reverse this or else they probably need to await an impulsive decline (because the pattern does allow for an ongoing rally if there's no reversal soon)
and
SPX has not gone bears way and they need to be aware of that. They probably need a reversal fairly soon to keep their near-term (and perhaps even intermediate term) hopes alive.
So anyway, here we are two weeks later, with the market about to gap up big. But at least that shouldn't be taking anyone by surprise.
Does this mean bulls have the all-clear? Well, not exactly -- they still have the all-time high to hurdle. But "nothing good happening for bears" (the past couple weeks) doesn't always mean "bulls are a lock." It just means there are no indications bears should get aggressive. Today's open is simply going to be a good illustration of why.
Just two charts today, because there's not much else that hasn't already been said already in recent updates. NYA first:
And SPX:
In conclusion, as I said earlier, this by no means "guarantees" bulls get new all-time highs -- but until bears see something go their way (i.e.- an impulsive decline; see April 28 warning), there's still little reason for them to be involved. Trade safe.
Stock Market Commentary 05/09/25
By Lawrence G. McMillan
The market rallied early this week, peaking out at about 5700 on $SPX. A modest pullback has taken place since then. There is resistance from there on up to 5800. A close above 5800 would be bullish. Otherwise, the SPX chart remains bearish.
There are multiple support areas on down to the early April lows at 4850-4950. They are marked with horizontal red lines on the $SPX chart in Figure 1. There is one gap left on the chart (circled in Figure 1).
Equity-only put-call ratios continue to drop rapidly, and that means they remain on their buy signals for stocks.
Market breadth continues to be positive enough to keep the breadth oscillators on buy signals. So, as long as these breadth oscillators are in overbought territory that is positive for the overall market.
$VIX has continued to fall as the market has rallied. In any case, the trend of $VIX is still technically upward, by the definition that we use. That will only be reversed if $VIX closes below its 200-day Moving Average.
Separately, the $VIX "spike peak" buy signal of April 9th has come to fruition, and long positions associated with it have been closed.
In summary, we are still maintaining a low-delta "core" bearish position because of the negative nature of the $SPX chart. In addition, we are trading the various confirmed signals around that, and we continue to roll deeply in-the-money options.
https://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1747054335369
https://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1747054335369
https://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1747054335369
https://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1747054335369
".....bulls have cleared every level they needed -- which tends to put the burden back onto bears to break those levels, to show they still have remaining firepower......"
http://www.pretzelcharts.com/
Lots of news since last update. For starters, Trump's "big announcement" was that we've worked out a trade deal with the UK, so that's really great news for the 79 people who drink Earl Grey tea. Also, on Wednesday, Jerome Powell announced the launch of a signature line of jarred fruit, called "Federal Preserves." The hope is that they'll sell a few hundred billion jars this year and thus be able to square the remaining $6.7 trillion on the Federal Reserve's balance sheet.
So this is really bullish stuff, if you haven't been paying attention -- and the charts reflect that. The market is clearly holding out high hopes for "Federal Preserves." (Don't tell the market that I made those up -- we don't want to cause a crash!)
As we can see on the SPX chart, there hasn't been much for bears to get excited about recently, so they'll now need to sustain trade and closes back below black and blue... though, be warned, at some point, the falling blue trendline (the one that runs from the all-time high to red b and beyond) might get tested (again) from above... and that wouldn't be bearish if it holds.
COMPQ is a bit more ambiguous still -- it has merely rallied back to the upside inflection point I suggested a month ago, but not yet beyond. So bears can hold out hope for a rejection here:
In conclusion, so far, bulls have cleared every level they needed -- which tends to put the burden back onto bears to break those levels, to show they still have remaining firepower. Trade safe.
"Today is, of course, a Fed day, so the market will likely decide the winner between these counts in fairly short order."
http://www.pretzelcharts.com/
Last update looked at the bull micro-count, so it's only right to look at the bear micro count in this update. The bear micro count is for a WXY off what I'm calling the "Trump Tariff Low":
WXYs (when correcting bear waves) consist of three ABCs -- two that trend higher, and an intervening ABC that trends lower.
The bull option remains the same as noted last update:
And COMPQ has, so far, been rejected from its standing upside inflection zone:
Today is, of course, a Fed day, so the market will likely decide the winner between these counts in fairly short order. Trade safe.
The hedge fund legend who predicted Black Monday sounds a new market warning, saying stocks will ‘go down to new lows’
Not exactly a hard call is it. But apparently like a Pandemic common sense is a rare thing these days. ME, I have the DATE SET because while this guy understands trumps stubbornness, I know his Vindictiveness He will try very hard to hold the market together till his announcement on JULY 4th. Why else would be place a 90-day extension that happens to land a few days after July 4th.
I cross my fingers the MARKET keeps those blinders on.
"....COMPQ has rallied all the way up to its upside inflection, and SPX is sporting a potentially complete or nearly complete wave (impulse?) -- so......."
http://www.pretzelcharts.com/
There are two charts that are really worth looking at today. The first is COMPQ, which has now bounced all the way from its downside inflection zone to its upside inflection zone -- both of which were drawn on this chart more than a month ago:
The next chart of major interest is SPX. I've illustrated on this chart that the rally can be counted as an impulse. As long time readers know, usually when I see an impulse, I'm fairly comfortable calling it out as such and drawing conclusions from it -- but in this case, I'm not at all confident in it, because the preceding pattern is so... odd. Nevertheless, it's there, and my job is to share what I see. So here it is:
In conclusion, COMPQ has rallied all the way up to its upside inflection, and SPX is sporting a potentially complete or nearly complete wave (impulse?) -- so we should at least be alert to the potential for a turn lower from this general zone. In a bear's perfect world, it would be the start of the next major wave down -- but in a bull's perfect world, it would just be wave (2)/B down, and hence only a correction. We'll watch carefully to see what develops from here. Trade safe.
Trump Says ‘I Don't Know' When Asked if He Has to ‘Uphold the Constitution'. This was a recent question and a disingenuous one. After a decade of TRUMP we knew the answer and refused to accept it.
Trump Has Bonkers ‘Junk’ Meltdown When Challenged on Tariffs
Millions of student-loan borrowers are about to be thrown into collections. Some say they're already 'barely scraping by.'
Trump mostly — but not entirely — rules out military action on Canada
'Could happen': Trump won't 'rule out' US military invasion of Greenland
Just a days news from an unhinged lunatic that sees the world as his playground. I can understand why the street is rallying. they just pretend his lunacy is an act. one that has been going on for a decade. I have all the confidence our Emperor of the world will have increased temper tantrums and blow everything up. His short fuss is already lit. I made a pledge that July 4th will be his Independence Day and it seems very likely. He WANTS to declare war and is itching to do so. He placed his own deadline for "talks" and he is likely to stick with it.
Here's Why A Short-Term Top Might Be Nearing
May 02, 2025 at 05:53 PM
Tom Bowley
Chief Market Strategist, EarningsBeats.com
https://stockcharts.com/articles/tradingplaces/2025/05/heres-why-a-shortterm-top-migh-402.html
I feel like the short-term risk is turning once again and I'll explain why in my analysis below. Please don't misunderstand. I suggested a bottom was in place a few weeks ago and I LOVE what has been happening in terms of manipulation/accumulation and I LOVE the fact that we were able to quickly regain both the 20-day EMA and 50-day SMA on our major indices.
However, here are the four major indices and where they're at currently on their respective charts and their next key overhead resistance levels:
Dow Jones
https://d.stockcharts.com/img/articles/2025/05/02/d07a815b-f05b-4045-9e4c-cffdd0f74473.jpg
We did manage to close just above the 50-day SMA here, but the Dow Jones still appears vulnerable to me. Given the fact that the S&P 500 has room to run up to what is now major price resistance at 5782, I could see the Dow Jones moving a bit higher to challenge the late-March high at approximately 42750. That could serve as a neckline.
S&P 500
https://d.stockcharts.com/img/articles/2025/05/02/d627398d-f72b-4171-be51-80bb072acaf0.jpg
20-day EMA resistance? No problem, went right through. Gap resistance 5500? Ditto. 50-day SMA resistance. Ditto. This rally has been impressive. Key levels of price resistance have failed and this tells me that we're not going to violate the low at 4835. It's set in stone, in my opinion. There are still a couple of key resistance levels on the S&P 500 that we'll have to deal with next week. The first will be the early-April rebound attempt that failed near 5700. Today's intraday high was 5700. The next one, however, will be the biggest on the chart and that's where we last failed in late March - at 5782.
NASDAQ 100:
https://d.stockcharts.com/img/articles/2025/05/02/7066f3c7-365d-4adf-9904-299ed8e54462.jpg
Looks similar to the S&P 500, but I did add the RSI to this chart. During downtrends, RSI 60 tends to be rather big resistance. We see many rallies fail at or near that level. The NDX just crossed RSI 60....barely. At our Friday intraday high, the NASDAQ 100 pulled within 100 points (less than 0.5%) of the late-March high near 20250. I don't know if we turn here or not, but I do know the risks are elevated.
Russell 2000:
https://d.stockcharts.com/img/articles/2025/05/02/f30ca386-53b2-44d0-8f34-75b380233383.jpg
The 197 level offered great price support on multiple occasions, so when we see a heavy-volume breakdown like we saw in early April, we should recognize how important it is to clear that same price resistance on the way back up. We did so on Friday with gusto. I absolutely LOVE the sudden accumulation that's taken place in the IWM. I believe that will result in a much larger move at some point later this year. But are we due for another round of selling first, perhaps at upcoming price resistance levels marked above? We'll soon find out.
Be careful ahead, especially if a rising-volume, reversing candle prints on our major indices sometime next week.
Sentiment
Check out this 5-day SMA of the equity only put call ratio ($CPCE):
https://d.stockcharts.com/img/articles/2025/05/02/8421116e-a79d-4c83-be8c-b86ec383a300.jpg
We just hit 0.55, showing the most complacency we've seen in the past 5 weeks or so. Extreme low readings have previously marked corrections and/or cyclical bear markets and that was one key topping indicator that I discussed back in January/February. Other prior moves down to 0.55 have also resulted in short-term tops. I thought the current .55 reading was worth pointing out for this reason.
Seasonality could also play a role. Early May (through the 5th) tends to provide historical tailwinds, but the middle part of May (6th through 25th) has a history of being rather challenging. The 5th is Monday, so given everything I've discussed above and knowing that our bullish seasonal window could soon be closing, watch for a potential reversing candle as a sign to think about reducing risk (covered calls, S&P 500 puts for insurance, moving to cash, etc.).
I'm not ready to definitively call a short-term top here, but I do want to point out that the SHORT-TERM risks of being long right now are growing. Do with that what you may.
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Happy trading!
Tom
Buffet is an old fool, an alarmist with no ability to reason or analyze his way out of a paper bag. His 10 quarter (2 1/2 year) program to sell stocks for cash means he is a fool. he never had any ability to determine the stock market valuation. he must be completely wrong since the market has zoomed way ahead in that timeframe. He is in the camp I am in. He called this market for what it is for over 2 years. Either HE is washed up or "I" have the pleasure of thinking side by side.
I have presented EXACT SAME ARGUMENT. He references trade war leading into real war. Now that I have a partner in my deranged attitude, I feel much comforted. The notion that Wall Street knows what it is doing is as preposterous as the last time we had a major crisis. In fact that proved beyond a shadow of a doubt just how slow witted and greedy it is. The most shocking mind-boggling thing that came out of that event s how easy be repeat the same argument and mistake. In FACT most everyone that made that mistake is using the SAME arguments to stick with a market that will surely crash.
Dealing in LOGIC, Common Sense, and simple analytics should have aligned the investor and stock market to a completely different conclusion.
Investing.com -- Warren Buffett has issued a massive warning on the dangers of protectionism, arguing that trade should not be used as a political weapon and calling tariffs "an act of war" that can lead to damaging consequences.
“Trade tariffs are an act of war… Trade should not be a weapon,” the Berkshire Hathaway (NYSE:BRKa) chairman said at annual shareholder meeting. His comments come amid growing concern over escalating U.S. trade tensions.
Buffett, long known for his optimism about the American economy, underscored that while the U.S. has benefited from free trade, weaponizing it could be counterproductive.
“Trade can be an act of war and [tariffs] have led to bad things,” he added.
Stock Market Commentary 05/02/25
By Lawrence G. McMillan
$SPX has risen for eight days in a row and is off to a positive start today, which would make it nine. This type of action has been accompanied by buy signals from breadth, equity-only put-call ratios, and MVB -- not to mention short-term buy signals such as "$VIX crossover" and "oscillator differential." Still, as impressive as all that is, the $SPX chart is still bearish because it's still in a potential downtrend.
Yes, $SPX has penetrated through the steep downtrend line that connected the February and March highs (see figure 1), but it is now approaching its declining 200-day Moving Average at 5750 plus other general resistance in the 5600-5700 area. If it were to turn back down from here, then the pattern of lower highs would still be in place just with less slope to the downtrend line.
However, a close above 5800 would be quite bullish and would remove this negativity from the $SPX chart.
There is support at 5300 (where there is a gap on the chart circled in Figure 1). Further support exists at 5100 and 4850-4950. This week's lows at 5433 could also be considered a lesser support area.
Equity-only put-call ratios are finally in agreement on buy signals. Both ratios have rolled over and are trending lower now.
Breadth has been extremely positive, and the breadth oscillators remain on buy signals. They are deeply in overbought territory which is a good thing when $SPX is trying to establish a new upward leg.
Meanwhile, $VIX continues to decline as this broad stock market rally persists. Some might say that $VIX is declining "grudgingly." Note how fast it returned to the 200-day Moving Average last August compared with now (Figure 4).
In any case, the decline in $VIX means that the "spike peak" buy signal from April 7th continues to be in effect. Simultaneously, though, the trend of $VIX sell signal remains in place as well, since $VIX is still above its 200-day Moving Average.
In summary, most of the indicators are bullish, but the chart of $SPX has yet to agree. We've seen similar situations in the past, and normally it's the chart of $SPX that is eventually correct. So, we are still maintaining a low-delta "core" bearish position, while trading the other signals around that. Be sure to continue to roll deeply in-the-money positions.
https://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1746208111035
https://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1746208111035
https://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1746208111035
https://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1746208111035
https://www.msn.com/en-us/news/politics/rubio-s-team-launches-witch-hunt-for-staff-who-criticized-alex-jones/ar-AA1E0XVu
https://www.msn.com/en-us/news/us/email-mistake-reveals-secret-plans-to-end-research-on-head-start-and-other-child-safety-net-programs/ar-AA1E1tS3
https://www.msn.com/en-us/money/markets/japan-threatens-to-offload-its-1-trillion-us-treasury-holdings-if-trump-trade-talks-don-t-go-well/ar-AA1E2Wkn
https://www.msn.com/en-us/news/world/trump-threatens-massive-new-china-sanctions-over-iranian-oil/ar-AA1E0fSj
All this while GREED is keeping the market on a quest to reach and exceed the old highs. Too bad once earning season ends TRUMP reemerges. I love it.
It means on July 4th we should start a nasty drop. I assume we are around 6,000 on the SPX. the major support is at 4800. That is a 20% drop that I see as the best-case scenario, all in one week timeframe. The massive animosity towards Trump and refusal to cave into his demands will result in a concerted effort to band together to force us pain. That included the EU. From dumping treasuries to accelerated massive embargoes and national pride refusing our business. A one-man wrecking crew. I am ABSOLUTELY SURE!
The BIGGEST danger is CHINA and this is the ONE Nation that TRUMP is focusing on. If he goes thru with his threat to stop all trade with China this market will not crash but dissolve completely. One big drop day after day after day. China has many tools to fight us economically and they will use them all. TRUMP threat demand on Iran Oil is no less dramatic than our embargo of OIL exports to Japan some FOUR MONTHS before the Pearl Harbor attack.
For now I can assume a minimum of 20% drop in that one week after July 4th announcement (assuming there actually is an announcement). Obviously if we slide between now and July 4th that percentage shrinks just based on technical support.
The stupidity of this nation in all aspects of our lives reminds me of the easier route to dismiss consequences for a Pandemic. We are repeating the same mistake but this one has far-reaching longer-term consequences. The solution cannot be to throw money out the window, There is no internal mechanism to shield us for a trade war against the world. BUT my biggest fear is WAR! If trump is not stopped, unlikely, he will start a war that ends in billions lost. he is that insane and we are that accommodative.
"SPX is in the ballpark of another POSSIBLE resistance zone, but so far, bulls have been lumbering right through all of those."
http://www.pretzelcharts.com/
A couple hits since last update:
1. The back-test of the red trend lines occurred.
2. The April 23 upside target was ~captured.
SPX is in the ballpark of another POSSIBLE resistance zone, but so far, bulls have been lumbering right through all of those. And that successful back-test of the breakout is not helpful to bears. Every now and then, though, you will see a successful back-test that leads to one more push which then falters, so it's not a slam dunk just for bulls just yet... but it's still encouraging for them.
NYA is back to its black line:
And INDU has finally gotten on the same page as everyone else:
In conclusion, keep in mind that the most bullish possible pattern here would be a bull nest to new highs. And while the market isn't quite behaving right for that at the moment (there should be more upside momentum), that can change in a heartbeat. On the flip side, it does keep open the option that we're dealing with something else -- at least, as of this second, that's an option. But either way, bears aren't doing anything to get them excited or even really have them do anything other than watch and wait for an impulsive turn -- again, at least, for now. Trade safe.
Seems the impeachment option will never get here. Trump just made a direct threat to CHINA.
Trump threatens massive new China sanctions over Iranian oil "ALERT: All purchases of Iranian Oil, or Petrochemical products, must stop, NOW! Any Country or person who buys ANY AMOUNT of OIL or PETROCHEMICALS from Iran will be subject to, immediately, Secondary Sanctions," Trump posted to Truth Social.
"They will not be allowed to do business with the United States of America in any way, shape, or form."
It was not clear how such sanctions would be implemented, or when; administration spokespeople were not immediately available to comment.
Between the lines: While Trump did not name China in his post, the State Department has said that China is "by far" the largest importer of Iranian oil.
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The moron just attacked CHINA directly. Looks like any war will be with the two most powerful nuclear arsenals. I am sure everyone will shrug this off. I wonder what Chinas move is next. We might never see July 4th at this rate.
"SPX has taken on the appearance of a somewhat unorthodox ending diagonal..."
http://www.pretzelcharts.com/
The market hasn't done much in recent days, so not a lot to add to the big picture, but I do want to call attention to some things on the near-term SPX chart:
And INDU still remains as something of a thorn in bulls' sides for now:
Nothing new has happened beyond that. Trade safe.
Pretzel :
(1) Pretzel presents both a Bull and Bear case.
(2) Pretzel gives both Triggers and Targets
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