#$iwm

Last week, the review of the macro market indicators saw, with just 2 trading days left in the month of June, equity markets were settling into a consolidation zone for the large caps as money rotated into the flying small caps. Elsewhere, looked for Gold ($GLD) to continue a short term downtrend while Crude Oil ($USO) joined with its own short term downtrend. The US Dollar Index ($DXY) looked to continue higher testing a break of the 15 month range and morphing into an uptrend while US Treasuries ($TLT) continued to hold over support in consolidation. The Shanghai Composite ($ASHR) looked to continue the consolidation in a slow drifting range higher while Emerging Markets ($EEM) paused after a long run of new highs in their uptrend.

The Volatility Index ($VXX) looked to continue in the normal zone keeping at least a slight tailwind behind equities. The charts of the $SPY, the $QQQ and the $IWM continued to look strong on the longer timeframe with the IWM leading and the SPY and QQQ consolidating. On the shorter timeframe the SPY and the QQQ still had some work left in the short term bounce to prove the pullback was over. Making a new all-time high with higher momentum readings would solidify that. The IWM, however, was looking strong, after a new all-time high both Thursday and Friday.

The week played out with Gold finding support and showing a bounce Thursday while Crude Oil continued to move lower. The US Dollar pulled back from its recent high while Treasuries fell back near to bottom of the consolidation range. The Shanghai Composite managed a small bounce off of its long term moving average while Emerging Markets continued to consolidate at a higher low.

The Volatility Index fell back all week ending near the lows of the year. This relieved pressure on equities and they rose early in the week with the SPY continuing through Wednesday but the IWM and QQQ stalling and seeing late week profit taking. The SPY joined them Thursday, short of the June high. The QQQ is narrowing a consolidation range while the IWM holds near record highs. What does this mean for the coming week? Let’s look at some charts.

The SPY came into the week about 3.5% off its high and consolidating in a symmetrical triangle. It set the bottom rail of the triangle Monday and then rose Tuesday and Wednesday. It briefly touched the top Thursday before reversing lower to close just above the 20 day SMA.The RSI is level at the midline in the bullish zone and the MACD falling and about to turn negative after failing to cross up. Downside risk remains with the momentum divergence drawing another lower high, for now.

The weekly chart shows a narrow inside candle closing at the 300% extension of the retracement of the 2022 drop. The RSI is drifting lower in the bullish zone with the MACD rolling over and positive. There is support lower at 742 and 740 then 733 and 728 before 724 and 718. There is resistance above at 748.50 and 751.50 then 755.50 and 760. Uptrend.

With the month of June and its non-farm payroll report in the rearview mirror, the high correlation of the equity market indexes may be starting to disconnect. Elsewhere, look for Gold to continue a short term downtrend along with Crude Oil extending its downtrend. The US Dollar Index looks to continue flirt with a break of the 15 month range and morphing into an uptrend while US Treasuries continue to hold over support in consolidation. The Shanghai Composite looks to continue the consolidation in a slow drifting range higher while Emerging Markets pause and digest after a long run of new highs in their uptrend.

The Volatility Index looks to continue in the normal zone keeping at least a slight tailwind behind equities. Despite this the broad indexes have gone nowhere on the week. The charts of the SPY, the QQQ and the IWM continue to look strong on the longer timeframe with the IWM leading and the SPY and QQQ consolidating. On the shorter timeframe the SPY and the QQQ still have some work left in the short term bounce to prove the pullback is over. Making a new all-time high, or at least a move over the June high, with higher momentum readings would solidify that. The IWM, however, is looking strong, after making a new all-time high Tuesday. Use this information as you prepare for the coming week and trad’em well.

Santa Claus Rally starts today. The Santa Claus Rally was discovered and named by Yale Hirsch in 1972 and published in our 1973 Stock Trader’s Almanac as the last five trading days of the year and the first two trading days of the New Year. This short, sweet rally is usually good for about 1.3% on the S&P 500, but the real significance of the SCR is as an indicator. 

It is our first seasonal indicator of the year ahead. Years when there was no Santa Claus Rally tended to precede bear markets or times when stocks hit lower prices later in the year. As Yale’s famous line states (2026 Almanac page 118): “If Santa Claus Should Fail To Call, Bears May Come to Broad and Wall.” 

Russell 2000 has logged the greatest frequency (73%) and magnitude of gains (+0.41%) on the day after Christmas. Since 1988, NASDAQ has advanced 70.3% of the time with an average move of +0.37%. DJIA and S&P 500 have slightly softer records, but bullish, nonetheless. 

Two days after Christmas, the market is less bullish with NASDAQ down more often than up. Three days after Christmas R2K small caps take the lead advancing 62.2% of the time with an average gain of +0.46%. 

Looking further out, from 1950-1985 last 5 trading days of the year S&P 500 up 34 of 36 years, average gain 1.24%. 1986-2024 up 21 of 39 (no change in 2006), average gain 0.39%. 

Click here to view table full size…

With stocks popping on AI boom, Iran deal, and oil retreat news today, the Russell 2000 is up 16% since October intraday, leading the major indexes. NASDAQ is up ~8%, S&P ~7%, and DJIA ~5%. This is the heart of NASDAQ's and R2K's Best Eight Months — November through June.

The TACO Trade Trump Presidency Seasonal Cycle chart we've been tracking shows the spring bottom and subsequent rally right on track. We're not selling in May. We're holding NASDAQ and small caps through the Best Eight Months and letting the TACO Trade run.

When and if seasonal and midterm year weakness materializes, our MACD timing indicator will provide the signal to reposition — not Sell in May and go away. For now, technicals, earnings, macro trends, and the news cycle all point the same direction, and you don't fight the tape.

Last week, the review of the macro market indicators saw, with the month of June and its non-farm payroll report in the rearview mirror, the high correlation of the equity market indexes was starting to disconnect. Elsewhere, looked for Gold ($GLD) to continue a short term downtrend along with Crude Oil ($USO) extending its downtrend. The US Dollar Index ($DXY) looked to continue flirt with a break of the 15 month range and morphing into an uptrend while US Treasuries ($TLT) continued to hold over support in consolidation. The Shanghai Composite ($ASHR) looked to continue the consolidation in a slow drifting range higher while Emerging Markets ($EEM) paused and digested after a long run of new highs in their uptrend.

The Volatility Index ($VXX) looked to continue in the normal zone keeping at least a slight tailwind behind equities. Despite this the broad indexes had gone nowhere on the week. The charts of the $SPY, the $QQQ and the $IWM continued to look strong on the longer timeframe with the IWM leading and the SPY and QQQ consolidating. On the shorter timeframe the SPY and the QQQ still had some work left in the short term bounce to prove the pullback was over. Making a new all-time high, or at least a move over the June high, with higher momentum readings would solidify that. The IWM, however, was looking strong, after making a new all-time high Tuesday.

The week played out with Gold consolidating under the short term moving average while Crude Oil met resistance at the cross of its short term and long term moving averages in a bounce and fell back. The US Dollar held in a tight range around its short term moving average while Treasuries fell through support and consolidated at 6 week lows. The Shanghai Composite bounced after a fall through support to end at its long term moving average while Emerging Markets consolidated over support.

The Volatility Index ticked down early in the week but spiked briefly intraday Wednesday before resuming the move lower to end the week at the June low. This pinned equities early in the week but hey rose to new highs Thursday and Friday. This resulted in the SPY, the QQQ and the IWM also improving early but ending the week surviving a midweek hiccup lower. What does this mean for the coming week? Let’s look at some charts.

The SPY came into the week in a symmetrical triangle just above the 20 day SMA. It rose to the upper rail Monday and got knocked back through Wednesday, but only to the 20 day SMA. Thursday it moved higher cracking the triangle and Friday continued to close at a higher high. The RSI is rising off the midline in the bullish zone and the MACD rising and positive.

The weekly chart shows another narrow candle closing above the 300% extension of the retracement of the 2022 drop. The RSI is holding in the bullish zone with the MACD avoiding a roll over and positive. There is support lower at 751.50 and 748.50 followed by 742 and 740 then 733 and 728. There is resistance above at 755.50 and 760. Uptrend.

Heading into the start of earnings season, equity markets seem to have settled into a consolidation at their all-time highs. Elsewhere, look for Gold to continue the short term downtrend along with Crude Oil after its Dead Cat Bounce. The US Dollar Index looks to continue flirt with a break of the 15 month range and transition into an uptrend while US Treasuries threaten to break down through support in consolidation. The Shanghai Composite looks to continue the consolidation in a slow drifting range while Emerging Markets consolidate in their uptrend.

The Volatility Index looks to continue in the normal zone keeping at least a slight tailwind behind equities. The charts of the SPY, the QQQ look ready to start a drift to the upside and possibly overtake the IWM as leaders again. They all continue to look strong on the longer timeframe consolidating at the highs. On the shorter timeframe the SPY made a higher high, a first step, and the QQQ still has some work left in the short term bounce to prove the pullback is over. Making a new all-time high, or at least a move over the June high, with higher momentum readings would solidify that. The IWM, however, possibly starting to feel the pinch of the negative momentum divergence in its consolidation. Use this information as you prepare for the coming week and trad’em well.

April is the second-best month of the year for DJIA and S&P 500 (since 1950) and fourth best for NASDAQ (since 1971). Despite pressure from the Iran war, surging energy costs, and the pending income tax deadline on April 15, the market has gotten off to a strong start this April. Gains as of today’s close range from 0.52% by DJIA to a solid 1.98% from NASDAQ.

The first half of April used to outperform the second half, but since around 1994 that has not been the case. The effect of April 15 Tax Deadline does appear to be diminished with strength generally present throughout April. Traders and investors also appear to be more focused on first quarter earnings and guidance throughout the entire month of April.

Last week, the review of the macro market indicators saw, with the month of May in the books and heading into a non-farm payroll week, equities continued to show strength, printing more new all-time highs. Elsewhere, looked for Gold ($GLD) to continue walking the fence between a downtrend and digestion in the uptrend while Crude Oil ($USO) bounced around in tightening consolidation around $100/bbl but near a change of character to a downtrend. The US Dollar Index ($DXY) looked to continue to drift higher in broad consolidation while US Treasuries ($TLT) continued to test support in consolidation after avoiding a shift in character.

The Shanghai Composite ($ASHR) looked to continue digestion in the short term uptrend while Emerging Markets ($EEM) made new highs in their uptrend. The Volatility Index ($VXX) looked to continue lower in the normal zone, giving a tailwind to equities. The charts of the $SPY, the $QQQ and the $IWM continued to look extremely strong on the longer timeframe with a 9th positive week for the SPY. On the shorter timeframe the SPY, the QQQ and the IWM also looked very strong, with all printing all-time highs to start the week and then again Thursday. The SPY and QQQ ended with a 3rd record while the IWM was just short of joining them.

The week played out with Gold falling back to retest the March lows while Crude Oil rebounded but stopped at another lower high and fell back. The US Dollar drifted up until a thrust Friday saw it finish at a 2 month high while Treasuries held in a tight range at support. The Shanghai Composite continued lower negating the short term uptrend and finishing at a nearly 2 month low while Emerging Markets started the week with back-to-back all-time highs before a sharp sell off.

The Volatility Index held in a tight range in the normal zone near the lows of the year. This initially gave equities a boost early in the week and they printed back-to-back all time highs to start the week. The rest of the week saw a bigger range and choppiness with the resultant move to the downside. This resulted in the SPY the QQQ and the IWM falling back to and through their short term moving averages. This was the first time since early April for the SPY and QQQ. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week at another all-time high. And the new week started with 2 more all-time highs Monday and Tuesday before a pause. Thursday saw a drop at the open recover all day and then it ended the week Friday printing a Marubozu Kicker candle (reversal) and strong move to the downside. This left it below the 20 day SMA for the first time since the beginning of April. The RSI is dropping at the midline in the bullish zone and the MACD dropping and positive.

The weekly chart shows the price pulling back through the 300% extension of the retracement of the 2022 drop and ending the streak of 9 positive weeks in a row. The RSI is rolling over in the bullish zone with the MACD rising and positive. There is support lower at 733 and 728 then 724 and 718 before 715 and 710. There is resistance above at 742 and 748.50 then 751.50 and 760. Uptrend.

SPY Weekly, $SPY

With the first week of June and the strong May employment report in the books, sentiment is shifting in the equity markets after starting the week at all-time highs. Elsewhere, look for Gold to continue a short term downtrend while Crude Oil falls in consolidation under $100/bbl, near a change of character to a downtrend. The US Dollar Index looks to continue to move higher in broad consolidation near the top of the range while US Treasuries continue to test support in consolidation after avoiding a shift in character. The Shanghai Composite looks to continue digestion in the short term uptrend, on the edge of a shift to downtrend, while Emerging Markets pull back in their uptrend.

The Volatility Index looks to continue lower in the normal zone, but higher, giving a bit less of a tailwind to equities. The charts of the SPY, the QQQ and the IWM continue to look extremely strong on the longer timeframe and have reset out of overbought conditions. On the shorter timeframe the SPY, the QQQ and the IWM also look strong, with all printing all-time highs to start the week, but resetting momentum lower with short term pullbacks to end the week. This could continue. Use this information as you prepare for the coming week and trad’em well.

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Last week, the review of the macro market indicators saw, heading into the unofficial start of summer, equities continued to show strength, regaining their swagger following a stumble to start the week. Elsewhere looked for Gold ($GLD) to continue walking the fence between a downtrend and digestion in the uptrend while Crude Oil ($USO) bounced around in tightening consolidation around $100/bbl. The US Dollar Index ($DXY) looked to continue to drift higher in broad consolidation while US Treasuries ($TLT) continued to test support and a possible continuation of their downtrend. The Shanghai Composite ($ASHR) looked to continue digestion in the short term uptrend while Emerging Markets ($EEM) digested the new highs in their uptrend.

The Volatility Index ($VXX) looked to continue lower in the normal zone, giving a tailwind to equities. The charts of the $SPY, the $QQQ and the $IWM continued to look extremely strong on the longer timeframe with a 8th positive week for the SPY. On the shorter timeframe the SPY, the QQQ and the IWM also looked very strong, retesting all-time highs after working off some of the overheated momentum levels.

The week played out with Gold drifting lower in consolidation to the long term moving average and bouncing while Crude Oil dropped back to a 6 week low. The US Dollar moved slightly lower in a tight range while Treasuries moved back into the consolidation zone negating a breakdown. The Shanghai Composite drifted lower on the edge of a downtrend while Emerging Markets made a series of new all-time highs after a gap up.

Volatility continued to tick lower, closing at a 4½ month low. This removed any pressure on equities and they rallied to new highs. This resulted in the SPY and the QQQ printing multiple new all-time highs including one to end the week Friday. What does this mean for the coming week? Let’s look at some charts.

SPY Daily, $SPY

The SPY came into the week just a stone’s throw from the all-time high. It corrected that with a new all-time high Tuesday and then paused Wednesday. Thursday saw another move higher and a new all-time high and it followed it up Friday ending at another all-time high. The RSI is moving up into overbought territory in the bullish zone and the MACD curling to cross up and positive.

The weekly chart shows the price continuing above the 300% extension of the retracement of the 2022 drop extending the streak to 9 positive weeks in a row. The RSI is rising in the bullish zone with the MACD rising and positive. There is support lower at 751.50 and 748.50 then 742 and 733 before 728 and 724. There is resistance above 758. Uptrend.

SPY Weekly, $SPY

With the month of May in the books and heading into a non-farm payroll week, equities continue to show strength, printing more new all-time highs. Elsewhere, look for Gold to continue walking the fence between a downtrend and digestion in the uptrend while Crude Oil bounces around in tightening consolidation around $100/bbl but near a change of character to a downtrend. The US Dollar Index looks to continue to drift higher in broad consolidation while US Treasuries continue to test support in consolidation after avoiding a shift in character. The Shanghai Composite looks to continue digestion in the short term uptrend while Emerging Markets make new highs in their uptrend.

The Volatility Index looks to continue lower in the normal zone, giving a tailwind to equities. The charts of the SPY, the QQQ and the IWM continue to look extremely strong on the longer timeframe with a 9th positive week for the SPY. On the shorter timeframe the SPY, the QQQ and the IWM also look very strong, with all printing all-time highs to start the week and then again Thursday. The SPY and QQQ ended with a 3rd record while the IWM was just short of joining them. Use this information as you prepare for the coming week and trad’em well.

As the Iran War enters its second week, we have seen market volatility surge and crude oil spike to nearly $120 per barrel from a pre-war price of around $65. But for all the turmoil and geopolitical unknowns that remain, the market is proving to be rather resilient. We recently noted this tendency in last Monday’s post, “S&P 500 Performance During War, Geopolitical & Energy Crises.” From its close on Friday, February 27, the last day of trading before the war began, S&P 500 is down –1.41% as of today’s close and is off just –2.82% from its all-time closing high on January 27.

Over the past 21 years, the first half of March has been weak and although for a different reason this year, the major indexes are not that far off of their respective average performance this March. After lagging in January and February, NASDAQ is leading the market now, up +0.13% in March as of today’s close. DJIA and Russell 2000, which were strong in January and February, now lag, off 2.60% and 3.20% respectively. S&P 500 splits the difference between NASDAQ and DJIA, down –1.42%.