Last Week’s Comment: Touch & Go at the 50D SMA. Friday price failed to break above 20D SMA, which will be the level to watch next week/s.

Level 1: Why is it happening?

Economic Data: Production: ISM PMI vs. SPX

Analysis: No changes since last week.
Current Situation: Bullish
Future Outlook: Bullish

Economic Data: Production: Dallas & Philadelphia Manufacturing vs. SPX

Analysis: No changes since last week.
Current Situation: Neutral
Future Outlook: Bullish

Economic Data: Consumption: Consumer Sentiment

Analysis: Increase on sentiment, yet still below this year’s highs.
Current Situation: Neutral
Future Outlook: Bullish

Interest Rates: FED, 2yr, 10yr, and 30yr Rates

Analysis: May the worst be over? Inflation was high, as expected, but also known to be temporary due to the Iran war. If that gets resolved (and it seems so) then we may be headed towards a deflationary period were we could see the Fed even lowering rates.
Current Situation: Bearish
Future Outlook: Neutral

Context Investors Sentiment: Credit Spreads

Credit spreads move in tandem with the S&P, but when they diverge, that’s often an early warning signal.

Analysis: Spike on Friday after a yo-yo week.
Current Situation: Bullish
Outlook: Bullish

Level 1: Why is it happening? Summary

Economic Data (long-term): Bullish/Bullish
Interest Rates: Bearish/Neutral
Investors Sentiment: Bullish/Bullish

Level 2: What is happening?

Price Action: SPX – Long Trend – 20 & 10 years

Analysis: Price re-entered the 10Y channel. The 20Y channel is still quite far down (circa 7,200 area).
Current Situation: Bullish
Future Outlook: Bearish

Price Action: RSP – Trend – Weekly & Daily

Analysis: Shooting star on the weekly chart right at the top and with a bearish divergence with RSI. In the daily chart we see how MACD is about to create a bearish cross at high levels. I’m downgrading the outlook from neutral to bearish.
Current Situation: Bullish
Future Outlook: Bearish

Breadth & Volatility: % Stocks above SMAs vs. RSP

Above 200 Daily SMA

Above 20, 50, and 200 Daily SMAs

Analysis: Breadth is expanding and we have room to run. We remain on bullish territory.
Current Situation: Bullish
Future Outlook: Bullish

Breadth & Volatility: Bullish Pct. Index & McClellan Summation Index

Analysis: Both indicators continue in their bullish areas and turning to point higher.
Current Situation: Bullish
Future Outlook: Bullish

Breadth & Volatility: Ratio Low Volatility Stocks / SPY vs. SPY and RSP

Analysis: The signal reset in just two weeks from an over-extended situation with a bearish outlook (due to that over-extension) to touch the signal line, so coming back to a neutral position, yet remaining in the bullish area.
Current Situation: Bullish
Future Outlook: Bullish

Breadth & Volatility: New Highs vs. SPY & RSP

Analysis: No extreme signal, yet we remain on a bullish outlook.
Current Situation: Neutral
Future Outlook: Bullish

Breadth & Volatility: VIX vs. SPY & RSP

This chart is mainly to detect market bottoms.

Analysis: VIX touched level 23 and sharply dropped below 18. This opens up a neutral-to-bullish outlook, but resets the current trend. To decide if we have entered a new trend, we zoom in to the 1 hour level and we can see how the upward trend was broken and we could possibly be on a downward trend.

Current Situation: Bullish
Future Outlook: Neutral-to-Bullish

Options: (Inverted) Put/Call Ratio vs. SPY

Analysis: For this week, I wanted to compare a similar situation where the indicator is above (below as it is inverted) the 0.5 level (dotted red line) and trending downwards. For that I had to go back to the last two times we had a similar situation. End of 2021 and summer 2023. Both instances where having a bullish situation but ended up leading towards a bearish situation, long in the first case, and quite short on the second case. In 2022 the Fed raised rates at the fastest pace ever, so I tend to believe that in 2026 we may repeat 2023, more than 2022.
Current Situation: Bullish
Future Outlook: Bearish

Options: Gamma Exposure – SPX

Analysis: We are in positive GEX territory, yet very close to the GEX flip.
Current Situation: Bullish
Outlook: Neutral

Level 2: What is happening? Summary

Price Action: Bullish/Bearish
Breadth & Volatility: Bullish/Bullish
Options: Bullish/Bearish

Level 3: Where is it happening?

Bulls vs. Bears: RSP vs. RSPD (Cons. Disc. – Bulls) and RSPS (Cons. Sta. – Bears)

Analysis: Ratio (yellow) just closed a higher low pattern, correlated with the higher low seen at the bulls (green).
Current Situation: Bearish-to-Neutral
Future Outlook: Bullish

Sectors Rotation

Market & Economy Rotation

US Sectors order by ISM PMI Correlation (between parenthesis)
Growth Sectors - shall outperform when the market is bullish:
XLK: Technology (71%)
XLY: Cons. Discretionary (67%)
XLI: Industrials (66%)
XLB: Basic Materials (66%)
XLF: Financials (59%)

Value Sectors - shall outperform when the market is bearish:
XLV: Healthcare (55%)
XLC: Communications (49%)
XLE: Energy (44%)
XLU: Utilities (35%)
XLP: Cons. Staples (30%)
XLRE: Real Estate (16%)

Analysis:
With a market moving at this speed is difficult to decide in which moment of the cycle we are. We know that the economy is improving from lower levels, so we could consider it “Early Recovery”. The market, after the noise brought by the Iran war, is signalling towards a Bull Market as we shall see Technology and Industrials leading.

Sectors Performance

The market bullish momentum is expanding as we can see in the 1 week performance and even in the 1 month, as technology is not the top performer (despite being the heaviest by market cap., hence driving the S&P and the Nasdaq along with it).

Sectors Bullish Percent Index

Growth Sectors:

Value Sectors:

Any sectors below their red levels are good opportunities to find great companies at good valuations or buy sector ETFs (buy cheap). Those sectors above their Green levels are candidates to be sold (sell expensive).

Current Situation: Bullish & Future Outlook: Bullish:
C. Disc., Industrials, Financials, Communications, C.Staples, Real Estate

Current Situation: Bullish & Future Outlook: Bearish:
Healthcare, Energy

Current Situation: Bearish & Future Outlook: Bullish:
Materials, Technology, Utilities

Current Situation: Bearish & Future Outlook: Bearish:
None

SPX has a Bullish Current Situation and a Bullish Future Outlook.

Level 3: Where is it happening? Summary

Bulls vs. Bears: Bearish-to-Neutral/Bullish
Market & Economy Rotation: Bull Market

All Levels Summary and Final Thoughts

Level 1 Summary - The Why

Economic Data (long-term): Bullish/Bullish
Interest Rates: Bearish/Neutral
Investors Sentiment: Bullish/Bullish

Level 2 Summary - The What

Price Action: Bullish/Bearish
Breadth & Volatility: Bullish/Bullish
Options: Bullish/Bearish

Level 3 Summary - The Where

Bulls vs. Bears: Bearish-to-Neutral/Bullish
Market & Economy Rotation: Bull Market

Level 4: Scanning for opportunities

Great Companies with Great Technicals

Descriptive
Index: Any | Market Cap.: +Mid (+$2B) | Option/Short: Yes/Yes
Avg. Volume: >1M | Relative Vol.: Over 1 | Price: >$10
Fundamental
EPS Growth Next Year: >15% | EPS Growth Past 3 Years: >5% | Sales Growth Past 3 Years: >5%
- Sorted by P/E
Technical
Performance: Quarter Up | Price above 20D SMA & 50D SMA | Beta: >1 | ATR: > 1

None

S&P500 and Nasdaq New Highs

Descriptive
Index: S&P 500 and Nasdaq | Market Cap.: +Mid (+$2B) | Option/Short: Yes/Yes
Avg. Volume: >1M | Price: >$10
(order by Market Cap desc.)
Technical
50-Day New High

Highlights: C, CVS, MAR, SPG, NUE, STT, STLD, IBKR

Looking at these stocks, it seems to me that Steel is really trending higher. Guess, what requires a lot of steel? Yes, data centers and… Space X!

Disclaimer: The content on AMAT Investing is strictly for educational and learning purposes. The author is not a licensed financial advisor and holds no formal financial education. This post does not constitute professional financial advice. All investing involves risk of loss. Always conduct your own research and consult a licensed professional before making any investment decisions.

Last Week’s Comment: Finally! The drop that we seen coming for the last few weeks seems that is finally here. Once this correction is over, we will have a better place to enter the market.

Level 1: Why is it happening?

Economic Data: Production: ISM PMI vs. SPX

Analysis: ISM PMI points higher and Chicago PMI sharply increased last week.
Outlook: (very) Bullish

Economic Data: Production: Dallas & Philadelphia Manufacturing vs. SPX

Analysis: No changes since last week.
Outlook: Neutral

Economic Data: Consumption: Consumer Sentiment

Analysis: No changes since last week.
Outlook: Neutral

Interest Rates: FED, 2yr, 10yr, and 30yr Rates

Analysis: Strong employment numbers have increased the probabilities of a rate hike by the Fed this year. US economy is so strong that rates are calling for an increase. Markets will price in this possibility rather quickly (a possible explanation for Friday’s drop), after that, expect a mute reaction is the hike ends up happening and a positive reaction if it doesn’t.
Outlook: Neutral

Context Investors Sentiment: Credit Spreads

Credit spreads move in tandem with the S&P, but when they diverge, that’s often an early warning signal.

Analysis: Spreads dived on Friday, mirroring the market. I’m downgrading the outlook from bullish to neutral.
Outlook: Neutral

Level 1: Why is it happening? Summary

Economic Data (long-term): Bullish
Interest Rates: Neutral
Investors Sentiment: Neutral

Level 2: What is happening?

Price Action: SPX – Long Trend – 20 & 10 years

Analysis: Price re-entered the 10Y channel. The 20Y channel is still quite far down (circa 7,200 area).
Outlook: Bearish

Price Action: RSP – Trend – Weekly & Daily

Analysis: Shooting star on the weekly chart right at the top and with a bearish divergence with RSI. In the daily chart we see how MACD is about to create a bearish cross at high levels. I’m downgrading the outlook from neutral to bearish.
Outlook: Bearish

Breadth & Volatility: % Stocks above SMAs vs. RSP

Above 200 Daily SMA

Above 20, 50, and 200 Daily SMAs

Analysis: Believe it or not… the amount of stocks above their MAs has increased since last week. This past week was bad for big names but good for the rest of the market. We remain bullish.
Outlook: Bullish

Breadth & Volatility: Bullish Pct. Index & McClellan Summation Index

Analysis: Both indicators continue in their bullish areas but pointing lower. Downgrading the outlook from bullish to neutral.
Outlook: Neutral

Breadth & Volatility: Ratio Low Volatility Stocks / SPY vs. SPY and RSP

Analysis: Sharp drop in this key signal. I’m downgrading the outlook from bullish to neutral-to-bearish
Outlook: Neutral-to-Bearish

Breadth & Volatility: New Highs vs. SPY & RSP

Analysis: Very low New Highs (grey line behind the yellow) with a downward trend (yellow). I’m leaving the outlook in neutral.
Outlook: Neutral

Breadth & Volatility: VIX vs. SPY & RSP

This chart is mainly to detect market bottoms.

Analysis: VIX shot from 15 to 21. We can see a similar scenario on last year’s October, where the pull back was very brief. I’m downgrading the outlook from bullish to bearish.
Outlook: Bearish

Options: (Inverted) Put/Call Ratio vs. SPY

Analysis: Last week we had an extreme P/C read (grey) and average at historically top highs and this week the market finally drop. I would like to see an extreme P/C on the other side to start getting bullish. I’m keeping the outlook as Bearish.
Outlook: Bearish

Options: Gamma Exposure – SPX

Analysis: Sharp GEX reversal from last week’s very positive to this week negative. I’m downgrading the outlook from bullish to bearish.
Outlook: Bearish

Level 2: What is happening? Summary

Price Action: Bearish
Breadth & Volatility: Neutral
Options: Bearish

Level 3: Where is it happening?

Bulls vs. Bears: RSP vs. RSPD (Cons. Disc. – Bulls) and RSPS (Cons. Sta. – Bears)

Analysis: Ratio (yellow) was about to make a bullish cross and turned around to continue in bearish territory.continues in bearish territory. I’m leaving the outlook in neutral.
Outlook: Neutral

Sectors Rotation

Market & Economy Rotation

US Sectors order by ISM PMI Correlation (between parenthesis)
Growth Sectors - shall outperform when the market is bullish:
XLK: Technology (71%)
XLY: Cons. Discretionary (67%)
XLI: Industrials (66%)
XLB: Basic Materials (66%)
XLF: Financials (59%)

Value Sectors - shall outperform when the market is bearish:
XLV: Healthcare (55%)
XLC: Communications (49%)
XLE: Energy (44%)
XLU: Utilities (35%)
XLP: Cons. Staples (30%)
XLRE: Real Estate (16%)

Analysis:
With a market moving at this speed is difficult to decide in which moment of the cycle we are. We know that the economy is improving from lower levels, so we could consider it “Early Recovery”. The market, after the noise brought by the Iran war, is signalling towards a Bull Market as we shall see Technology and Industrials leading.

Sectors Performance

In the US market, there is a predominant group above everything else, technology. As W. Buffet said, do not bet against America - so do not bet against technology.

Sectors Bullish Percent Index

Growth Sectors:

Value Sectors:

Any sectors below their red levels are good opportunities to find great companies at good valuations or buy sector ETFs (buy cheap). Those sectors above their Green levels are candidates to be sold (sell expensive).

Buy Opportunities: Utilities, Consumer Discretionary, Materials
Sell Opportunities: Real Estate

Level 3: Where is it happening? Summary

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

All Levels Summary and Final Thoughts

Level 1 Summary - The Why

Economic Data (long-term): Bullish
Interest Rates: Neutral
Investors Sentiment: Neutral

Level 2 Summary - The What

Price Action: Bearish
Breadth & Volatility: Neutral
Options: Bearish

Level 3 Summary - The Where

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

Level 4: Scanning for opportunities

Stock Screener for Great Companies with Great Technicals

Descriptive
Index: Any | Market Cap.: +Mid (+$2B) | Option/Short: Yes/Yes
Avg. Volume: >1M | Relative Vol.: Over 1 | Price: >$10
Fundamental
EPS Growth Next Year: >15% | EPS Growth Past 3 Years: >5% | Sales Growth Past 3 Years: >5%
- Sorted by P/E
Technical
Performance: Quarter Up | Price above 20D SMA & 50D SMA | Beta: >1 | ATR: > 1

And look who’s back for a short while:

Disclaimer: The content on AMAT Investing is strictly for educational and learning purposes. The author is not a licensed financial advisor and holds no formal financial education. This post does not constitute professional financial advice. All investing involves risk of loss. Always conduct your own research and consult a licensed professional before making any investment decisions.

Last Week’s Comment: Daily double top broken out. And the low volume rally continues.

Level 1: Why is it happening?

Economic Data: Production: ISM PMI vs. SPX

Analysis: Sharp increase in Chicago’s PMI.
Outlook: (very) Bullish

Economic Data: Production: Dallas & Philadelphia Manufacturing vs. SPX

Analysis: Small increase in Dallas Manufacturing Index.
Outlook: Neutral

Economic Data: Consumption: Consumer Sentiment

Analysis: No changes since last week.
Outlook: Neutral

Interest Rates: FED, 2yr, 10yr, and 30yr Rates

Analysis: Slight reduction on rates, yet elevated in comparison with Fed’s reference rate. If the Fed is forced to elevate the rates it could be bad for stocks.

Comment: As this push to higher rates and higher inflation comes from the supply side of the economy (prices are going up because there is less supply not more demand), the Fed may consider, rightly so, to not increase rates and wait for the supply shock to pass. This ‘no-movement’ by the Fed will be seen as good for the markets. Based on this alternative point of view, I’m upgrading the outlook from bearish to neutral.

Outlook: Neutral

Context Investors Sentiment: Credit Spreads

Credit spreads move in tandem with the S&P, but when they diverge, that’s often an early warning signal.

Analysis: Spreads continue to advance.
Outlook: Bullish

Level 1: Why is it happening? Summary

Economic Data (long-term): Bullish
Interest Rates: Neutral
Investors Sentiment: Bullish

What is happening? – Level 2

Price Action: SPX – Long Trend – 20 & 10 years

Analysis: Both channels broken on the upper side. Despite the action being bullish, this shall be considered late in the cycle and our outlook shall be bearish. We shall be selling positions here, not entering new ones.
Outlook: Bearish

Price Action: RSP – Trend – Weekly & Daily

Analysis: Equal weight jumped above previous S/R level (daily). Weekly RSI is still not overbought. This rally could continue for a while, expanding the number of stocks participating in the rally.
Outlook: Neutral to Bullish

Breadth & Volatility: % Stocks above SMAs vs. RSP

Above 200 Daily SMA

Above 20, 50, and 200 Daily SMAs

Analysis: With Above 200D (red) in bullish territory, and above 20D (green) and 50D (blue) above their 50 level, I’m upgrading the outlook from neutral to bullish.
Outlook: Bullish

Breadth & Volatility: Bullish Pct. Index & McClellan Summation Index

Analysis: Both indicators continue in their bullish areas. I’m keeping the bullish outlook.
Outlook: Bullish

Breadth & Volatility: Ratio Low Volatility Stocks / SPY vs. SPY and RSP

Analysis: Sharp increase in the ratio. In retrospective, I shall have kept my bullish outlook for longer.

Comment: The ratio’s distance to its 50D MA is very elevated. Looking into previous years, in 2023 we have a similar situation developing during the month of June. Markets rallied until the end of July, with a first scare drop on June 15th.

Outlook: Bullish

Breadth & Volatility: New Highs vs. SPY & RSP

Analysis: Very low New Highs (grey line behind the yellow) with a downward trend (yellow). I’m leaving the outlook in neutral (definitely not bearish).
Outlook: Neutral

Breadth & Volatility: VIX vs. SPY & RSP

This chart is mainly to detect market bottoms.

Analysis: VIX getting too low. Yet it can remain there for weeks as it happened before (for example during summer 2025).
Outlook: Bullish

Options: (Inverted) Put/Call Ratio vs. SPY

Analysis: Extreme P/C read (grey) and average at historically top highs. I’m keeping the outlook as Bearish.
Outlook: Bearish

Options: Gamma Exposure – SPX

Analysis: First time that we see such a high GEX at 8,000, which is 420 points away.
Outlook: Bullish

Level 2: What is happening? Summary

Price Action: Neutral
Breadth & Volatility: Bullish
Options: Neutral (one Bearish and one Bullish reading)

Where is it happening? – Level 3

Bulls vs. Bears: RSP vs. RSPD (Cons. Disc. – Bulls) and RSPS (Cons. Sta. – Bears)

Analysis: Ratio (yellow) continues in bearish territory but improving rapidly (as we have seen in the RSP price action). Bulls (green) seem also to start reacting positively. I’m upgrading the outlook to neutral.
Outlook: Neutral

Sectors Rotation

Market & Economy Rotation

US Sectors order by ISM PMI Correlation (between parenthesis)
Growth Sectors - shall outperform when the market is bullish:
XLK: Technology (71%)
XLY: Cons. Discretionary (67%)
XLI: Industrials (66%)
XLB: Basic Materials (66%)
XLF: Financials (59%)

Value Sectors - shall outperform when the market is bearish:
XLV: Healthcare (55%)
XLC: Communications (49%)
XLE: Energy (44%)
XLU: Utilities (35%)
XLP: Cons. Staples (30%)
XLRE: Real Estate (16%)

Analysis:
With a market moving at this speed is difficult to decide in which moment of the cycle we are. We know that the economy is improving from lower levels, so we could consider it “Early Recovery”. The market, after the noise brought by the Iran war, is signalling towards a Bull Market as we shall see Technology and Industrials leading.

Sectors Performance

In the US market, there is a predominant group above everything else, technology. As W. Buffet said, do not bet against America - so do not bet against technology.

Sectors Bullish Percent Index

Growth Sectors:

Value Sectors:

Any sectors below their red levels are good opportunities to find great companies at good valuations or buy sector ETFs (buy cheap). Those sectors above their Green levels are candidates to be sold (sell expensive).

Buy Opportunities: Utilities, Consumer Discretionary, Materials (soon)
Sell Opportunities: Real Estate

Level 3: Where is it happening? Summary

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

All Levels Summary and Final Thoughts

Level 1 Summary - The Why

Economic Data (long-term): Bullish
Interest Rates: Neutral
Investors Sentiment: Bullish

Level 2 Summary - The What

Price Action: Neutral
Breadth & Volatility: Bullish
Options: Neutral (one Bearish and one Bullish reading)

Level 3 Summary - The Where

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

Level 4: Scanning for opportunities

Stock Screener for Great Companies with Great Technicals

Descriptive
Index: Any | Market Cap.: +Mid (+$2B) | Option/Short: Yes/Yes
Avg. Volume: >1M | Relative Vol.: Over 1 | Price: >$10
Fundamental
EPS Growth Next Year: >15% | EPS Growth Past 3 Years: >5% | Sales Growth Past 3 Years: >5%
- Sorted by P/E
Technical
Performance: Quarter Up | Price above 20D SMA & 50D SMA | Beta: >1 | ATR: > 1

Disclaimer: The content on AMAT Investing is strictly for educational and learning purposes. The author is not a licensed financial advisor and holds no formal financial education. This post does not constitute professional financial advice. All investing involves risk of loss. Always conduct your own research and consult a licensed professional before making any investment decisions.

Last Week’s Comment: A MACD on a bear setup and a double top occurring at ATH on a rally with lower volume than average… but trends go longer than anyone expects.

Level 1: Why is it happening?

Economic Data: Production: ISM PMI vs. SPX

Analysis: No changes since last week.
Outlook: Bullish

Economic Data: Production: Dallas & Philadelphia Manufacturing vs. SPX

Analysis: Sharp decline in Philadelphia’s manufacturing index.
Outlook: Neutral to Bearish

Economic Data: Consumption: Consumer Sentiment

Analysis: Sentiment continues to decrease (yet this data series is based on online surveys and heavily politically biased). Yet this week we had bad forward guidance by Walmart, warning about the pain the consumer is experiencing due to inflation.
Outlook: Neutral

USD & Interest Rates: FED, 2yr, 10yr, and 30yr Rates

Analysis: Slight reduction on rates, yet elevated in comparison with Fed’s reference rate. If the Fed is forced to elevate the rates it could be bad for stocks.
Outlook: Bearish

USD & Interest Rates: USD vs EEM ILF and S&P500

Analysis: USD up = ILF down. A long war is not a great outlook for ILF.
Outlook: Neutral (the longer the war the higher the oil & gas disruption)

Context Investors Sentiment: Credit Spreads

Credit spreads move in tandem with the S&P, but when they diverge, that’s often an early warning signal.

Analysis: Sharp increase in Spreads. I keep the bullish outlook.
Outlook: Bullish

Level 1: Why is it happening? Summary

Economic Data (long-term): Neutral
USD & Interest Rates: Bearish (due to Interest Rates)
Investors Sentiment: Bullish

What is happening? – Level 2

Price Action: SPX – Long Trend – 20 & 10 years

Analysis: Both channels broken on the upper side. Despite the action being bullish, this shall be considered late in the cycle and our outlook shall be bearish. We shall be selling positions here, not entering new ones.
Outlook: Bearish

Price Action: RSP – Trend – Weekly & Daily

Analysis: Price (equal weight index) jumped above previous S/R level. If sustained could signal a bullish move to new ATH. I’m improving the outlook from Bearish to Neutral
Outlook: Neutral

Breadth & Volatility: % Stocks above SMAs vs. RSP

Above 200 Daily SMA

Above 20, 50, and 200 Daily SMAs

Analysis: Last week, the Above 200D (red) did trigger the bearish signal, but this week it triggered the bullish signal again. The above 20D (green) and 50D (blue) have crossed below their 50 level. I’m upgrading the outlook from bearish to neutral, as I want to see continuation of this new signal to confirm the bullish outlook.
Outlook: Neutral

Breadth & Volatility: Bullish Pct. Index & McClellan Summation Index

Analysis: Bullish Pct. Index has crossed back above the 50 level. I’m updating the outlook from bearish to bullish.
Outlook: Bullish

Breadth & Volatility: Ratio Low Volatility Stocks / SPY vs. SPY and RSP

Analysis: We are still in bullish territory, but the ratio has lost momentum, which could signal a local top. I keep the outlook in neutral.
Outlook: Neutral

Breadth & Volatility: New Highs vs. SPY & RSP

Analysis: Very low New Highs (grey line behind the yellow) with a downward trend (yellow). I’m leaving the outlook in neutral (definitely not bearish).
Outlook: Neutral

Breadth & Volatility: VIX vs. SPY & RSP

This chart is mainly to detect market bottoms.

Analysis: Downtrend resumed. I’m upgrading the outlook to bullish
Outlook: Bullish

Options: (Inverted) Put/Call Ratio vs. SPY

Note: Updating this chart to overlay SPY behind the ratio.

Analysis: Historically, at this levels in the P/C ratio, the market finds difficulties to advance. A downward slope in the P/C ratio 10D SMA historically means that the market (SPY) will go down. I’m keeping the outlook as Bearish.
Outlook: Bearish

Options: Gamma Exposure – SPX

Analysis: Positive Gamma keeps increasing to higher levels at 7,500, 7,600, 7,700 and 7,800. We don’t see much support in lower levels. In case of a sudden drop in the markets, prices will fall sharply. I’m keeping the bullish outlook as we still are in a positive gamma environment.
Outlook: Bullish

Level 2: What is happening? Summary

Price Action: Bearish
Breadth & Volatility: Neutral
Options: Neutral (one Bearish and one Bullish reading)

Where is it happening? – Level 3

Bulls vs. Bears: RSP vs. RSPD (Cons. Disc. – Bulls) and RSPS (Cons. Sta. – Bears)

Analysis: Ratio (yellow) continues in bearish territory. Bulls (green) are extremely weak, any recovering from these very low levels could be seen as a bullish development.
Outlook: Bearish

Sectors Rotation

Market & Economy Rotation

US Sectors order by ISM PMI Correlation (between parenthesis)
Growth Sectors - shall outperform when the market is bullish:
XLK: Technology (71%)
XLY: Cons. Discretionary (67%)
XLI: Industrials (66%)
XLB: Basic Materials (66%)
XLF: Financials (59%)

Value Sectors - shall outperform when the market is bearish:
XLV: Healthcare (55%)
XLC: Communications (49%)
XLE: Energy (44%)
XLU: Utilities (35%)
XLP: Cons. Staples (30%)
XLRE: Real Estate (16%)

Analysis:
With a market moving at this speed is difficult to decide in which moment of the cycle we are. We know that the economy is improving from lower levels, so we could consider it “Early Recovery”. The market, after the noise brought by the Iran war, is signalling towards a Bull Market as we shall see Technology and Industrials leading.

Sectors Performance

Sectors Bullish Percent Index

Growth Sectors:

Value Sectors:

Any sectors below their red levels are good opportunities to find great companies at good valuations or buy sector ETFs (buy cheap). Those sectors above their Green levels are candidates to be sold (sell expensive).

Buy Opportunities: Utilities, Consumer Discretionary, Materials (sson)
Sell Opportunities:

Level 3: Where is it happening? Summary

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

All Levels Summary and Final Thoughts

Level 1 Summary - The Why

Economic Data (long-term): Neutral
USD & Interest Rates: Bearish (due to Interest Rates)
Investors Sentiment: Bullish

Level 2 Summary - The What

Price Action: Bearish
Breadth & Volatility: Neutral
Options: Neutral (one Bearish and one Bullish reading)

Level 3 Summary - The Where

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

Level 4: Scanning for opportunities

Stock Screener for Great Companies with Great Technicals

Descriptive
Index: S&P500 | Market Cap.: +Mid (+$2B) | Option/Short: Yes/Yes
Avg. Volume: >1M | Relative Vol.: Over 1 | Price: >$20
Fundamental
EPS Growth Next Year: >15%
Technical
Performance: Quarter Up | Price > 50D SMA | Price > 200D SMA | Beta > 1 | ATR > 1

Stock Screener for New Highs

Descriptive
Index: Any | Market Cap.: +Mid (+$2B) | Option/Short: Yes/Yes
Avg. Volume: >1M | Relative Vol.: Over 1 | Price: >$10
Fundamental
Sorted by P/E
Technical
Signal: New High

Disclaimer: The content on AMAT Investing is strictly for educational and learning purposes. The author is not a licensed financial advisor and holds no formal financial education. This post does not constitute professional financial advice. All investing involves risk of loss. Always conduct your own research and consult a licensed professional before making any investment decisions.

Last Week’s Comment: To better understand my current thinking let’s review Bob Farrell’s 10 market rules:

1. Rule #01: Markets tend to return to the mean over time

2. Rule #02: Excesses in one direction will lead to an opposite excess in the other direction

3. Rule #03: There are no new eras - excesses are never permanent

4. Rule #04: Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways

5. Rule #05: The public buys the most at the top and the least at the bottom

6. Rule #06: Fear and greed are stronger than long-term resolve

7. Rule #07: Markets are stronger when they are broad, and weakest when they narrow to a handful of blue-chip names

8. Rule #08: Bear markets have three stages - sharp down, reflexive rebound, and a draw-out fundamental downtrend

9. Rule #09: When all the experts and forecasts agree - something else is going to happen

10. Rule #10: Bull markets are more fun than bear markets

Lance Roberts (from Real Investment Advice) has a fantastic paper on these rules: https://realinvestmentadvice.com/resources/blog/the-rules-of-bob-farrell-an-updated-illustrated-guide/

I think that we are in Rule #04.

Level 1: Why is it happening?

Economic Data: Production: ISM PMI vs. SPX

Analysis: No changes since last week.
Outlook: Bullish

Economic Data: Production: Dallas & Philadelphia Manufacturing vs. SPX

Analysis:No changes since last week.
Outlook: Bullish

Economic Data: Consumption: Consumer Sentiment

Analysis: No changes since last week.
Outlook: Neutral-Bullish

USD & Interest Rates: FED, 2yr, 10yr, and 30yr Rates

Analysis: No much change since last week. This is really not good. Interests keep increasing. Long-term (30 year) have a psychological resistance at 5% and we are at 5.120%. Markets may embrace this narrative and drag down everything.

Devils Advocate View: As market returns are accelerating rapidly, driven by raising earnings, if the government wants to sell bonds, they need to raise the returns to make them attractive. So, high yields are a result of a strong market.
Outlook: Bearish (?)

USD & Interest Rates: USD vs EEM ILF and S&P500

Analysis: USD up = ILF down. A long war is not a great outlook for ILF.
Outlook: Neutral (the longer the war the higher the oil & gas disruption)

Context Investors Sentiment: Credit Spreads

Credit spreads move in tandem with the S&P, but when they diverge, that’s often an early warning signal.

Analysis: Spreads moved in parallel with the market this past week. As spreads keep trending higher I keep my bullish outlook.
Outlook: Bullish

Level 1: Why is it happening? Summary

Economic Data (long-term): Bullish (with a neutral note on that consumer confidence)
USD & Interest Rates: Bearish (due to Interest Rates)
Investors Sentiment: Bullish

What is happening? – Level 2

Price Action: SPX – Long Trend – 20 & 10 years

Analysis: Both channels broken on the upper side. Despite the action being bullish, this shall be considered late in the cycle and our outlook shall be bearish. We shall be selling positions here, not entering new ones.
Outlook: Bearish

Price Action: RSP – Trend – Weekly & Daily

Analysis: Price crossed below the 20D SMA and both RSI and MACD confirm the down turn.
Outlook: Bearish

Breadth & Volatility: % Stocks above SMAs vs. RSP

Above 200 Daily SMA

Above 20, 50, and 200 Daily SMAs

Analysis: Above 200D did trigger the bearish signal. The above 20D (green) and 50D (blue) have crossed below their 50 level.
Outlook: Bearish

Breadth & Volatility: Bullish Pct. Index & McClellan Summation Index

Analysis: Bullish Pct. Index has crossed below the 50 level. I’m updating the outlook from neutral to bearish.
Outlook: Bearish

Breadth & Volatility: Ratio Low Volatility Stocks / SPY vs. SPY and RSP

Analysis: Volatility ratio impacts more SPY than RSP. We can see the price divergence between SPY (blue) and RSP (green). It is still not clear who will push or pull the other.
Outlook: Neutral

Breadth & Volatility: New Highs vs. SPY & RSP

Analysis: Very low New Highs (grey line behind the yellow) with a downward trend (yellow). I’m updating the outlook from bullish to neutral.
Outlook: Neutral

Breadth & Volatility: VIX vs. SPY & RSP

This chart is mainly to detect market bottoms.

Analysis: Sideways trend as this past week has seen more volatility. This changed the previous downward trend. I’m downgrading the trend to Neutral
Outlook: Neutral

Options: (Inverted) Put/Call Ratio vs. SPY

Analysis: Historically, at this levels in the P/C ratio, the market finds difficulties to advance. A downward slope in the P/C ratio 10D SMA historically means that the market (SPY) will go down. I’m keeping the outlook as Bearish.
Outlook: Bearish

Options: Gamma Exposure – SPX

Analysis: Positive Gamma keeps increasing to higher levels at 7,500, 7,600, 7,700 and 7,800. We don’t see much support in lower levels. In case of a sudden drop in the markets, prices will fall sharply. I’m keeping the bullish outlook as we still are in a positive gamma environment.
Outlook: Bullish

Level 2: What is happening? Summary

Price Action: Bearish
Breadth & Volatility: Bearish
Options: Neutral (one Bearish and one Bullish reading)

Where is it happening? – Level 3

Bulls vs. Bears: RSP vs. RSPD (Cons. Disc. – Bulls) and RSPS (Cons. Sta. – Bears)

Analysis: Bearish signal (yellow) triggered and Bulls (green) are very weak and not getting stronger.
Outlook: Bearish

Sectors Rotation

Market & Economy Rotation

US Sectors order by ISM PMI Correlation (between parenthesis)
Growth Sectors - shall outperform when the market is bullish:
XLK: Technology (71%)
XLY: Cons. Discretionary (67%)
XLI: Industrials (66%)
XLB: Basic Materials (66%)
XLF: Financials (59%)

Value Sectors - shall outperform when the market is bearish:
XLV: Healthcare (55%)
XLC: Communications (49%)
XLE: Energy (44%)
XLU: Utilities (35%)
XLP: Cons. Staples (30%)
XLRE: Real Estate (16%)

Analysis:
With a market moving at this speed is difficult to decide in which moment of the cycle we are. We know that the economy is improving from lower levels, so we could consider it “Early Recovery”. The market, after the noise brought by the Iran war, is signalling towards a Bull Market as we shall see Technology and Industrials leading.

Sectors Performance

Analysis: Due to the stale situation with the Iran war, Energy led this week’s performance. The last quarter’s performance shows the tale of two markets. Energy and Technology (and Communications) leading and the rest of the market in a pretty bad situation in some sectors.

Sectors Bullish Percent Index

Growth Sectors:

Value Sectors:

Any sectors below their red levels are good opportunities to find great companies at good valuations or buy sector ETFs (buy cheap). Those sectors above their Green levels are candidates to be sold (sell expensive).

Buy Opportunities: Utilities, Consumer Discretionary
Sell Opportunities: Real Estate

Level 3: Where is it happening? Summary

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

All Levels Summary and Final Thoughts

Level 1 Summary - The Why

Economic Data (long-term): Bullish (with a neutral note on that consumer confidence)
USD & Interest Rates: Bearish (due to Interest Rates)
Investors Sentiment: Bullish

Level 2 Summary - The What

Price Action: Bearish
Breadth & Volatility: Bearish
Options: Neutral (one Bearish and one Bullish reading)

Level 3 Summary - The Where

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

Level 4: Scanning for opportunities

Stock Screener

Descriptive
Index: S&P500 | Market Cap.: +Mid (+$2B) | Option/Short: Yes/Yes
Avg. Volume: >1M | Relative Vol.: Over 1 | Price: >$20
Fundamental
EPS Growth Next Year: >15%
Technical
Performance: Quarter Up | Price > 50D SMA | Price > 200D SMA | Beta > 1 | ATR > 1

I like: AMAT and APP:

Disclaimer: The content on AMAT Investing is strictly for educational and learning purposes. The author is not a licensed financial advisor and holds no formal financial education. This post does not constitute professional financial advice. All investing involves risk of loss. Always conduct your own research and consult a licensed professional before making any investment decisions.

Last Week’s Comment: Despite last week’s (daily) shooting star candlestick, overbought RSI, and high MACD, the market kept going higher. Remember that price is the only thing that pays. All other indicators are more useful as filters in a screener than predicting future price movements.

The weekly chart shows a different picture

Level 1: Why is it happening?

Economic Data: Production: ISM PMI vs. SPX

Analysis: No changes since last week.
Outlook: Bullish

Economic Data: Production: Dallas & Philadelphia Manufacturing vs. SPX

Analysis:No changes since last week.
Outlook: Bullish

Economic Data: Consumption: Consumer Sentiment

Analysis: Slight decrease in sentiment. High gasoline prices makes nobody happy. I’m updating the outlook from Bullish to Neutral-Bullish
Outlook: Neutral-Bullish

USD & Interest Rates: FED, 2yr, 10yr, and 30yr Rates

Analysis: No much change since last week. This is really not good. Interests keep increasing. Long-term (30 year) have a psychological resistance at 5% and we are at 4.964%. Markets may embrace this narrative and drag down everything.
Outlook: Bearish

USD & Interest Rates: USD vs EEM ILF and S&P500

Analysis: USD slightly down and ILF improved a little bit. A long war is not a great outlook for ILF.
Outlook: Neutral (the longer the war the higher the oil & gas disruption)

Context Investors Sentiment: Credit Spreads

Credit spreads move in tandem with the S&P, but when they diverge, that’s often an early warning signal.

Analysis: Last week we saw a sharp increase in Spreads, and the markets (at least the market weighted indexes) advanced. This week, Spreads went quite parallel, yet I remain bullish.
Outlook: Bullish

Level 1: Why is it happening? Summary

Economic Data (long-term): Bullish (with a neutral note on that consumer confidence)
USD & Interest Rates: Bearish (due to Interest Rates)
Investors Sentiment: Bullish

What is happening? – Level 2

Price Action: SPX – Long Trend – 20 & 10 years

Analysis: Both channels broken on the upper side. Despite the action being bullish, this shall be considered late in the cycle and our outlook shall be bearish. We shall be selling positions here, not entering new ones.
Outlook: Bearish

Price Action: RSP – Trend – Weekly & Daily

Analysis: Price and RSI are forming a bearish divergence. Price is also reaching a previous resistance level at $205. The ods of a reversal are increasing.
Outlook: Neutral-Bearish

Breadth & Volatility: % Stocks above SMAs vs. RSP

Above 200 Daily SMA

Above 20, 50, and 200 Daily SMAs

Analysis: Above 200D did not trigger the bearish signal because the SMA is trending lower at the same rate, otherwise we will have by now a bearish signal. The above 20D (green) has crossed the 50 level. In all previous occasions of the same setup, the RSP went low. I’m keeping the bearish outlook.
Outlook: Bearish

Breadth & Volatility: Bullish Pct. Index & McClellan Summation Index

Analysis: Same readings as last weeks’. Both indexes are flat, which may signal a change in trend. Keeping the outlook in neutral.
Outlook: Neutral

Breadth & Volatility: Ratio Low Volatility Stocks / SPY vs. SPY and RSP

Analysis: Volatility ratio impacts more SPY than RSP. The signal is clearly bullish, even too bullish due to the incline of the ratio. Previous such step increases marked tops (dotted vertical blue line in Nov-2025). Due to this incline, I’m lowering the outlook to neutral from bullish.
Outlook: Neutral

Breadth & Volatility: New Highs vs. SPY & RSP

Analysis: No new highs readings and yet the SPY made new ATH. The divergence between SPY and RSP is quite remarkable. I’m keeping the bullish outlook.
Outlook: Bullish

Breadth & Volatility: VIX vs. SPY & RSP

This chart is mainly to detect market bottoms.

Analysis: The trend continues trending lower towards the 15 level. I’m downgrading to Neutral-Bullish as we are getting very close to level 15.
Outlook: Neutral-Bullish

Options: (Inverted) Put/Call Ratio vs. SPY

Analysis: Historically, at this levels in the P/C ratio, the market finds difficulties to advance. I’m keeping the outlook as Bearish.
Outlook: Bearish

Options: Gamma Exposure – SPX

Analysis: Positive Gamma keeps increasing to higher levels at 7,500. We don’t see much support in lower levels (in contrast from last week). I’m keeping the bullish outlook as we still are in a positive gamma environment.
Outlook: Bullish

Level 2: What is happening? Summary

Price Action: Bearish
Breadth & Volatility: Neutral
Options: Neutral (one Bearish and one Bullish reading)

Where is it happening? – Level 3

Bulls vs. Bears: RSP vs. RSPD (Cons. Disc. – Bulls) and RSPS (Cons. Sta. – Bears)

Analysis: Bearish signal (yellow) triggered and Bulls (green) are very weak and not getting stronger.
Outlook: Bearish

Sectors Rotation

Market & Economy Rotation

US Sectors order by ISM PMI Correlation (between parenthesis)
Growth Sectors - shall outperform when the market is bullish:
XLK: Technology (71%)
XLY: Cons. Discretionary (67%)
XLI: Industrials (66%)
XLB: Basic Materials (66%)
XLF: Financials (59%)

Value Sectors - shall outperform when the market is bearish:
XLV: Healthcare (55%)
XLC: Communications (49%)
XLE: Energy (44%)
XLU: Utilities (35%)
XLP: Cons. Staples (30%)
XLRE: Real Estate (16%)

Analysis:
With a market moving at this speed is difficult to decide in which moment of the cycle we are. We know that the economy is improving from lower levels, so we could consider it “Early Recovery”. The market, after the noise brought by the Iran war, is signalling towards a Bull Market as we shall see Technology and Industrials leading.

Sectors Performance

Analysis: Technology led this past week performance, Energy the YTD performance, followed by Basic Materials, and Industrials.
It’s interesting to see the poor performance in Financials and Healthcare. I guess that the market main narratives are AI, the US industrial boom (led by AI data centers), and obviously the Iran’s war.

Sectors Bullish Percent Index

Growth Sectors:

Value Sectors:

Any sectors below their red levels are good opportunities to find great companies at good valuations or buy sector ETFs (buy cheap). Those sectors above their Green levels are candidates to be sold (sell expensive).

Buy Opportunities: Consumer Staples
Sell Opportunities: None

Level 3: Where is it happening? Summary

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

All Levels Summary and Final Thoughts

Level 1 Summary - The Why

Economic Data (long-term): Bullish (with a neutral note on that consumer confidence)
USD & Interest Rates: Bearish (due to Interest Rates)
Investors Sentiment: Bullish

Level 2 Summary - The What

Price Action: Bearish
Breadth & Volatility: Neutral
Options: Neutral (one Bearish and one Bullish reading)

Level 3 Summary - The Where

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

Level 4: Scanning for opportunities

Stock Screener

Descriptive
Index: S&P500 | Market Cap.: +Mid (+$2B) | Option/Short: Yes/Yes
Avg. Volume: >1M | Relative Vol.: Over 1 | Price: >$20
Fundamental
EPS Growth Next Year: >15%
Technical
Performance: Quarter Up | Price > 50D SMA | Price > 200D SMA | Beta > 1 | ATR > 1

I like: SMCI, MRNA, and AMAT:

Disclaimer: The content on AMAT Investing is strictly for educational and learning purposes. The author is not a licensed financial advisor and holds no formal financial education. This post does not constitute professional financial advice. All investing involves risk of loss. Always conduct your own research and consult a licensed professional before making any investment decisions.

Anf for the Nasdaq:

Last Week’s Comment: Friday’s shooting star candlestick, together with overbought RSI and PPO (or MACD) is not a good omen (from the technical point of view).

Level 1: Why is it happening?

Economic Data: Production: ISM PMI vs. SPX

Analysis: No changes since last week.
Outlook: Bullish

Economic Data: Production: Dallas & Philadelphia Manufacturing vs. SPX

Analysis:No changes since last week.
Outlook: Bullish

Economic Data: Consumption: Consumer Sentiment

Analysis: Slight decrease in sentiment. High gasoline prices makes nobody happy.
Outlook: Bullish

USD & Interest Rates: FED, 2yr, 10yr, and 30yr Rates

Analysis: This is really not good. Interests keep increasing. Long-term (30 year) have a psychological resistance at 5% and we are at 4.964%. Markets may embrace this narrative and drag down everything.
Outlook: Bearish

USD & Interest Rates: USD vs EEM ILF and S&P500

Analysis: USD slightly down and so ILF. A long war is not a great outlook for ILF.
Outlook: Neutral (the longer the war the higher the oil & gas disruption)

Context Investors Sentiment: Credit Spreads

Credit spreads move in tandem with the S&P, but when they diverge, that’s often an early warning signal.

Analysis: Sharp increase in Spreads. This will keep fueling the bullish momentum.
Outlook: Bullish

Level 1: Why is it happening? Summary

Economic Data (long-term): Bullish
USD & Interest Rates: Bearish (due to Interest Rates)
Investors Sentiment: Bullish

What is happening? – Level 2

Price Action: SPX – Long Trend – 20 & 10 years

Analysis: 20 years channel has been broken on the upper side, signalling an overbought market. On the 10 years channel there is still a bit of room on the upper side. Despite being in a bull move, the outlook cannot be too bullish due to this overbought conditions.
Outlook: Neutral-Bearish

Price Action: RSP – Trend – Weekly & Daily

Analysis: RSP formed a lower high. RSI left the overbought area and is starting a decline trend. Daily PPO about to form a bear cross. Downgrading the outlook from Neutral to Neutral-Bearish
Outlook: Neutral-Bearish

Breadth & Volatility: % Stocks above SMAs vs. RSP

Above 200 Daily SMA

Above 20, 50, and 200 Daily SMAs

Analysis: Remember that RSP (equal weighted index) has not reached new all time highs as the SPY (market cap. weighted). These breadth indicators show us that there is still +40% of the market below their 200D SMA line. More stocks could join the rally or few stocks are holding up the party. Yet, the Above 200D SMA signal is still bullish, even if it is just for a little bit. We remain Neutral on this outlook,
Outlook: Neutral

Breadth & Volatility: Bullish Pct. Index & McClellan Summation Index

Analysis: The number of stocks in a bullish pattern (reported by the Bullish Percent Index) is not increasing. The Summation Index is flat, which may signal a change in trend. Downgrading the outlook from Bullish to Neutral.
Outlook: Neutral

Breadth & Volatility: Ratio Low Volatility Stocks / SPY vs. SPY and RSP

Analysis: No changes since last week.
Outlook: Bullish

Breadth & Volatility: New Highs vs. SPY & RSP

Analysis: No signs of extreme new highs/lows. As we are coming from a lower level, I maintain the Bullish outlook.
Outlook: Bullish

Breadth & Volatility: VIX vs. SPY & RSP

This chart is mainly to detect market bottoms.

Analysis: The trend continues trending lower towards the 15 level.
Outlook: Bullish

Options: (Inverted) Put/Call Ratio vs. SPY

Analysis: Historically, at this levels in the P/C ratio, the market finds difficulties to advance. I’m keeping the outlook as Bearish.
Outlook: Bearish

Options: Gamma Exposure – SPX

Analysis: Positive Gamma keeps increasing to higher levels at 7,200, 7,300, and even 7,400. The Gamma tail is positive. If markets are to drop, it shall not be a significant drop as per options positioning.
Outlook: Bullish

Level 2: What is happening? Summary

Price Action: Neutral-Bearish
Breadth & Volatility: Neutral
Options: Neutral

Where is it happening? – Level 3

Bulls vs. Bears: RSP vs. RSPD (Cons. Disc. – Bulls) and RSPS (Cons. Sta. – Bears)

Analysis: Bearish signal (yellow) triggered and Bulls (green) are very weak and not getting stronger.
Outlook: Bearish

Sectors Rotation

Market & Economy Rotation

US Sectors order by ISM PMI Correlation (between parenthesis)
Growth Sectors - shall outperform when the market is bullish:
XLK: Technology (71%)
XLY: Cons. Discretionary (67%)
XLI: Industrials (66%)
XLB: Basic Materials (66%)
XLF: Financials (59%)

Value Sectors - shall outperform when the market is bearish:
XLV: Healthcare (55%)
XLC: Communications (49%)
XLE: Energy (44%)
XLU: Utilities (35%)
XLP: Cons. Staples (30%)
XLRE: Real Estate (16%)

Analysis:
With a market moving at this speed is difficult to decide in which moment of the cycle we are. We know that the economy is improving from lower levels, so we could consider it “Early Recovery”. The market, after the noise brought by the Iran war, is signalling towards a Bull Market as we shall see Technology and Industrials leading.

Sectors Bullish Percent Index

Growth Sectors:

Value Sectors:

Any sectors below their red levels are good opportunities to find great companies at good valuations or buy sector ETFs (buy cheap). Those sectors above their Green levels are candidates to be sold (sell expensive).

Buy Opportunities: None
Sell Opportunities: None

US Cap. Weighted Sectors ordered by performance (desc):

Weekly:

Daily:

Level 3: Where is it happening? Summary

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

All Levels Summary and Final Thoughts

Level 1 Summary - The Why

Economic Data (long-term): Bullish
USD & Interest Rates: Bearish (due to Interest Rates)
Investors Sentiment: Bullish

Level 2 Summary - The What

Price Action: Neutral-Bearish
Breadth & Volatility: Neutral
Options: Neutral

Level 3 Summary - The Where

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

Level 4: Scanning for opportunities

Stock Screener

Descriptive
Index: S&P500 | Market Cap.: +Mid (+$2B) | Option/Short: Yes/Yes
Avg. Volume: >1M | Relative Vol.: Over 1 | Price: >$10
Fundamental
EPS Growth Next Year: >15%
Technical
Performance: Quarter Up | Price > 50D SMA | Price > 200D SMA

I really like: PWR and INTC

I will add them to my watchlist to enter a LEAPS once they retrace a bit.

Options Screener

I’m testing some Options Screeners.
From Insider Finance (https://www.insiderfinance.io/flow):

And we also see C in OptionStrat flow (https://optionstrat.com/flow):

Disclaimer: The content on AMAT Investing is strictly for educational and learning purposes. The author is not a licensed financial advisor and holds no formal financial education. This post does not constitute professional financial advice. All investing involves risk of loss. Always conduct your own research and consult a licensed professional before making any investment decisions.

Weekly:

Daily:

Comment: XLK is on the lead back again, and that is good. Is good to see leaders leading. XLE had a good week due to geopolitical events. Once these events are gone, XLE will fade to the back.

S&P is over extended, no doubt about it, and looking back to the latest V-shaped recovery (April 2025), it shall stall for a while waiting for the 20D SMA for support.

Level 1: Why is it happening?

Economic Data: Production: ISM PMI vs. SPX

Analysis: No changes since last week.
Outlook: Bullish

Economic Data: Production: Dallas & Philadelphia Manufacturing vs. SPX

Analysis: Philadelphia manufacturing index increased.
Outlook: Bullish

Economic Data: Consumption: Consumer Sentiment

Analysis: The sentiment has recovered and improved above pre-Iran war levels. So, even the US consumer is saying… war? what war???
Outlook: Bullish

USD & Interest Rates: FED, 2yr, 10yr, and 30yr Rates

Analysis: This is the last piece in the puzzle and the most worrisome. Long-dated rates shall come down, for me to believe that everything is good and that the US economy is booming and so will do the markets.
On the other side, even with the Iran war, the oil shock, tariffs, etc. and the rates are below the highs of 2023. There is hope (never a good investment companion) that rates will come down, and when they do, they may come down fast.
Outlook: Neutral to Bearish.

USD & Interest Rates: USD vs EEM ILF and S&P500

Analysis: We spoke before about the relationship between USD and EEM, and we can see it on the chart. Obviously, I did not come up with this idea. As I listen to investment Podcasts with experts that they sell their services online; I subscribed to some of this, expensive, services; and I read my fair amount of investment literature; somewhere in this pool of knowledge this USD-EEM correlation was mentioned. But today, I want to go a bit deeper and see what’s behind EEM, which are its constituents. Thanks to Finviz, here are the top 10 holdings:

The top 3, with a combined 23% weight, are memory related companies. Those that are right now booming due to AI. The recent outperformance of EEM has nothing to do with a weakening USD. It is all about AI.

The theoretical relationship between a weaker USD is good for Emerging Markets because all those international purchases that are done in USD (i.e., oil) become cheaper is true. But the correlation with the EEM ETF is not true anymore. Maybe it was years ago, but not today.

I checked other ETFs in the EEM area: VWO, IEMG, EMXC, SCHE. They all have similar constituents, with heavy concentrations on China and Taiwan.

Then I checked the correlation of USD vs. Latin America using ILF:

And here you can see a better correlation. Looking at ILF constituents, we see a better balanced portfolio between Minerals, Finance, and Energy.

As a result, I’m updating the chart to replace EEM by ILF as it makes more sense to consider emerging markets with growth potential Latin American rather than South Korea, China, and Taiwan (which are not emerging markets):

Outlook: Neutral (the longer the war the higher the oil & gas disruption)

Context Investors Sentiment: Credit Spreads

Credit spreads move in tandem with the S&P, but when they diverge, that’s often an early warning signal.

Analysis: Flat-ish movement in Credit Spreads, which correlates with the idea that the market is over extended and needs a bit of a pause. Yet the outlook remains bullish.
Outlook: Bullish

Level 1: Why is it happening? Summary

Economic Data (long-term): Bullish
USD & Interest Rates: Neutral
Investors Sentiment: Bullish

What is happening? – Level 2

Price Action: SPX – Long Trend – 20 & 10 years

Analysis: 20 years channel has been broken on the upper side, signalling an overbought market. On the 10 years channel there is still a bit of room on the upper side. Despite being in a bull move, the outlook cannot be too bullish due to this overbought conditions.
Outlook: Neutral

Price Action: RSP – Trend – Weekly

Analysis: We are getting closer to the upper BB band, which shall bring some resistance to the market. RSI is bullish and PPO is about to make a bullish cross.
Outlook: Neutral

Price Action: RSP – Trend – Daily

Analysis: RSI retracing from overbought territory and price facing some resistance or better a lack of support. We would prefer seeing the 20D SMA getting closer to the price to provide support. I’m downgrading the outlook from Bullish to Neutral.
Outlook: Neutral

Breadth & Volatility: % Stocks above 200 SMA vs. RSP

Analysis: Important retracement in breadth. We are very close to trigger the bearish signal. I’m downgrading the outlook from Bullish to Neutral
Outlook: Neutral

Breadth & Volatility: RSP and % Stocks above 200, 50, and 20 SMA

Analysis: 20D confirms that in the near-term, the bullish momentum may face some resistance. 50D SMAs shows that there is still room for more bullish action. The outlook gets downgraded from Bullish to Neutral
Outlook: Neutral

Breadth & Volatility: Bullish Pct. Index & McClellan Summation Index

Analysis: No changes since last week. Both signals in synch with market action and far away from any overbought or oversold area.
Outlook: Bullish

Breadth & Volatility: Ratio Low Volatility Stocks / SPY vs. SPY and RSP

Analysis: No changes since last week.
Outlook: Bullish

Breadth & Volatility: New Highs vs. SPY & RSP

Analysis: No signs of extreme new highs/lows. As we are coming from a lower level, I maintain the Bullish outlook.
Outlook: Bullish

Breadth & Volatility: VIX vs. SPY & RSP

This chart is mainly to detect market bottoms.

Analysis: The trend has changed. The volatility has dropped below 20. This normally is good for the market.
Outlook: Expect normal volatility

Options: (Inverted) Put/Call Ratio vs. SPY

Analysis: A extreme read on daily P/C ratio (grey) may signal a short-term top. I’m downgrading the outlook to Bearish.
Outlook: Bearish

Options: Gamma Exposure – SPX

Analysis: Very positive Gamma with key level at 7,100 and 7,200. The Gamma tail is positive.
Outlook: Bullish

Level 2: What is happening? Summary

Price Action: Neutral
Breadth & Volatility: Neutral
Options: Neutral to Bearish

Where is it happening? – Level 3

Bulls vs. Bears: RSP vs. RSPD (Cons. Disc. – Bulls) and RSPS (Cons. Sta. – Bears)

Analysis: We are about to make a Bearish signal (yellow) and Bulls (green) are very weak and not getting stronger.
Outlook: Bearish

Sectors Rotation: Sectors Bullish Percent Index

Growth Sectors:

Value Sectors:

US Sectors order by ISM PMI Correlation (between parenthesis)
Growth Sectors - shall outperform when the market is bullish:
XLK: Technology (71%)
XLY: Cons. Discretionary (67%)
XLI: Industrials (66%)
XLB: Basic Materials (66%)
XLF: Financials (59%)

Value Sectors - shall outperform when the market is bearish:
XLV: Healthcare (55%)
XLC: Communications (49%)
XLE: Energy (44%)
XLU: Utilities (35%)
XLP: Cons. Staples (30%)
XLRE: Real Estate (16%)

Analysis:
Any sectors below their red levels are good opportunities to find great companies at good valuations or buy sector ETFs (buy cheap). Those sectors above their Green levels are candidates to be sold (sell expensive).

Buy Opportunities:
Sell Opportunities: XLU

Market & Economy Rotation

Analysis:
With a market moving at this speed is difficult to decide in which moment of the cycle we are. We know that the economy is improving from lower levels, so we could consider it “Early Recovery”. The market, after the noise brought by the Iran war, is signalling towards a Bull Market as we shall see Technology and Industrials leading.

Level 3: Where is it happening? Summary

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

All Levels Summary and Final Thoughts

Level 1 Summary

Economic Data (long-term): Bullish
USD & Interest Rates: Neutral
Investors Sentiment: Bullish

Level 2 Summary

Price Action: Neutral
Breadth & Volatility: Neutral
Options: Neutral to Bearish

Level 3 Summary

Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market

Final Thoughts

Dominant Narrative: Is this a bull trap?

New all time highs! And in the middle of a war, with a new Fed chairman starting soon, and mid-term elections in the horizon. But are really all time-highs?

It depends on what you are looking at. In the chart above, the top chart is the RSP, which is the equal-weighted S&P500 ETF, and in the chart below the SPY, which is market-cap. weighted (plus the 50D SMA in both).

The RSP has found resistance at previous ATHs while the SPY has blasted through previous ATH levels. This over performance in SPY is due to technology, and knowing that software is not really having the best of its moments, then we know that Semiconductors are behind this move:

Can Semiconductors sustain this rally? Let’s have a look at history. This is the weekly chart for the last 10 years for semiconductors:

On the very left we have prices around $25, today we are above $500…

And if you don’t like semiconductors that much and prefer to invest in something more “real”, like infrastructure (railroads, highways, bridges, etc.) you could have taken those $25 5 years ago and invest in PAVE ETF:

I think that it pays to invest in the infrastructure behind the real or the digital world. Specially in a type of infrastructure that is always in need of renovation.

Disclaimer: The content on AMAT Investing is strictly for educational and learning purposes. The author is not a licensed financial advisor and holds no formal financial education. This post does not constitute professional financial advice. All investing involves risk of loss. Always conduct your own research and consult a licensed professional before making any investment decisions.

Weekly:

Daily:

Comment: After finding support in the 320D SMA, the market, in the last 13 sessions, has erased all the losses from the war and launched to all time highs. The previous resistance and round 7,000 level was broken without much fuss. Gaps on the way up created.

In the sectors analysis we see technology leading, that means risk on. The leaders are leading, so the market indexes will raise. The bulls are back with a vengeance!

Level 1: Why is it happening?

Economic Data: Production: ISM PMI vs. SPX

Analysis: No changes since last week.
Outlook: Bullish

Economic Data: Production: Dallas & Philadelphia Manufacturing vs. SPX

Analysis: Philadelphia manufacturing index increased.
Outlook: Bullish

Economic Data: Consumption: Consumer Sentiment

Analysis: The sentiment has deteriorated. Iran-war and the repercussions on gasoline price and overall fear of higher inflation have contributed to lower consumers’ optimism. We remain bullish as the Iran-war impact will be temporary and the sentiment was already quite low compared to previous readings (the consumer shall become more enthusiastic in the near future than the opposite).
Outlook: Bullish

USD & Interest Rates: FED, 2yr, 10yr, and 30yr Rates

Analysis: Turnaround in rates. We want to see a continuation to lower readings, and quickly, to declare all clear in the bond market.
Outlook: Neutral to Bearish.

USD & Interest Rates: USD vs EEM and S&P500

Analysis: USD 100 level resistance is proving to be difficult to break. The Iran-war developments towards peace have ease the pressure on the USD and allowed EEM to rally. I’m improving the outlook from Bearish to Neutral on the hopes of the Iran-war to de-escalate (no need to be resolved).
Outlook: Neutral (the longer the war the higher the oil & gas disruption)

Context Investors Sentiment: Credit Spreads

Credit spreads move in tandem with the S&P, but when they diverge, that’s often an early warning signal.

Analysis: Last week we saw the spreads raise. This was a good outlook for the market. This week, the spreads continued to raise, confirming the bullish outlook.
Outlook: Bullish

Level 1: Why is it happening? Summary

Economic Data (long-term): Bullish to Neutral
USD & Interest Rates: Neutral
Investors Sentiment: Bullish

What is happening? – Level 2

Price Action: SPX – Long Trend – 20 & 10 years

Analysis: The market is moving so fast that we are flip-flopping between bear to bull outlooks. We move from a significant long-term support to be near a long-term resistance in just a couple of weeks. The market still has some room on the upper side but it would be good to see some lateral moves to increase that upside room.
Outlook: Neutral

Price Action: RSP – Trend – Weekly

Analysis: We are getting closer to the upper BB band, which shall bring some resistance to the market. RSI is bullish and PPO is about to make a bullish cross.
Outlook: Neutral to Bullish

Price Action: RSP – Trend – Daily

Analysis: All SMA resistances broken in a “face ripping” rally. RSI entering overbought territory, yet that’s bullish. PPO is in a good bullish trend. Price has still upside room to rally.
Outlook: Bullish

Breadth & Volatility: % Stocks above 200 SMA vs. RSP

Analysis: Bull signal triggered with a % of stocks above their 200D SMA above it’s 50D SMA and above the 60%. This market still has a lot of room to rally.
Outlook: Bullish

Breadth & Volatility: RSP and % Stocks above 200, 50, and 20 SMA

Analysis: A deeper look on the percentage of stocks above their 20D and 50D SMAs shows that there is still room for more bullish action (as per the 50D). Some choppiness, or side movement, could come from the 20D, but nothing long lived.
Outlook: Bullish

Breadth & Volatility: Bullish Pct. Index & McClellan Summation Index

Analysis: Both signals in synch with market action and far away from any overbought or oversold area.
Outlook: Bullish

Breadth & Volatility: Ratio Low Volatility Stocks / SPY vs. SPY and RSP

Analysis: Last week the bullish signal triggered and it did not fail. This is one of the most reliable signals.
Outlook: Bullish

Breadth & Volatility: New Highs vs. SPY & RSP

Analysis: Another reliable signal. The market stops going down (or up) when there is nothing left to sell (or to buy) - at least in the short to medium term.
Outlook: Bullish

Breadth & Volatility: VIX vs. SPY & RSP

This chart is mainly to detect market bottoms.

Analysis: The trend has changed. The volatility has dropped below 20. This normally is good for the market.
Outlook: Expect normal volatility

Options: (Inverted) Put/Call Ratio vs. SPY

Analysis: Last week, the options market told us above this week’s rally. Now, we see the market getting overstretched. We could see a local top and the market rally halting for a while.
Outlook: Bullish to Neutral

Options: Gamma Exposure – SPX

Analysis: Very positive Gamma with key level at 7,100 and 7,200. The Gamma tail is positive.
Outlook: Bullish

Level 2: What is happening? Summary

Price Action: Neutral to Bullish
Breadth & Volatility: Bullish
Options: Bullish to Neutral

Where is it happening? – Level 3

Bulls vs. Bears: RSP vs. RSPD (Cons. Disc. – Bulls) and RSPS (Cons. Sta. – Bears)

Analysis: Bullish signal (yellow) triggered. Bulls (green) are still weak but getting stronger.
Outlook: Bullish

Sectors Rotation: Sectors Bullish Percent Index

Growth Sectors:

Value Sectors:

US Sectors order by ISM PMI Correlation (between parenthesis)
Growth Sectors - shall outperform when the market is bullish:
XLK: Technology (71%)
XLY: Cons. Discretionary (67%)
XLI: Industrials (66%)
XLB: Basic Materials (66%)
XLF: Financials (59%)

Value Sectors - shall outperform when the market is bearish:
XLV: Healthcare (55%)
XLC: Communications (49%)
XLE: Energy (44%)
XLU: Utilities (35%)
XLP: Cons. Staples (30%)
XLRE: Real Estate (16%)

Analysis:
Any sectors below their red levels are good opportunities to find great companies at good valuations or buy sector ETFs (buy cheap). Those sectors above their Green levels are candidates to be sold (sell expensive).

Buy Opportunities:
- XLRE has increased 10% in the last two weeks and yet the Bullish Percent Index is just getting above 50%. Is the market telling us that there are good opportunities in Real Estate?
- All growth sectors

Sell Opportunities: XLE and XLU

Market & Economy Rotation

Analysis:
With a market moving at this speed is difficult to decide in which moment of the cycle we are. We know that the economy is improving from lower levels, so we could consider it “Early Recovery”. The market, after the noise brought by the Iran war, is signalling towards a Bull Market as we shall see Technology and Industrials leading.

Level 3: Where is it happening? Summary

Bulls vs. Bears: Bullish
Market & Economy Rotation: Bull Market

All Levels Summary and Final Thoughts

Level 1 Summary

Economic Data (long-term): Bullish to Neutral
USD & Interest Rates: Neutral
Investors Sentiment: Bullish

Level 2 Summary

Price Action: Neutral to Bullish
Breadth & Volatility: Bullish
Options: Bullish to Neutral

Level 3 Summary

Bulls vs. Bears: Bullish
Market & Economy Rotation: Bull Market

Final Thoughts

Dominant Narrative: Iran’s war peace negotiations

Who would have said? A couple of weeks the world was about to end. No oil. Economic crisis. Chaos and war. Last Friday… All time highs! Technology is back, cyclicals are back, banks reported great earnings, and even software is rallying!

Will this last? The market seems to say yes. Will geopolitics behave and let us all enjoy a healthy bull market? Time will tell…

Disclaimer: The content on AMAT Investing is strictly for educational and learning purposes. The author is not a licensed financial advisor and holds no formal financial education. This post does not constitute professional financial advice. All investing involves risk of loss. Always conduct your own research and consult a licensed professional before making any investment decisions.

Weekly:

Daily:

Comment: The S&P found support at the daily SMA the 320 and rallied since then driven by the geopolitical news of a possible Iran-war resolution. Price has crossed all the daily SMAs that we follow: 200, 100, 50, and 20, closing on Friday at what it seems the daily SMA 100 support.

Why is it happening? – Level 1
Economic Data: Production: ISM PMI vs. SPX

Analysis: No changes since last week.
Outlook: Bullish

Why is it happening? – Level 1
Economic Data: Production: Dallas & Philadelphia Manufacturing vs. SPX

Analysis: No changes since last week.
Outlook: Bullish

Why is it happening? – Level 1
Economic Data: Consumption: Consumer Sentiment

Analysis: The sentiment has deteriorated. Iran-war and the repercussions on gasoline price and overall fear of higher inflation have contributed to lower consumers’ optimism. We remain bullish as the Iran-war impact will be temporary and the sentiment was already quite low compared to previous readings (the consumer shall become more enthusiastic in the near future than the opposite).
Outlook: Bullish

Why is it happening? – Level 1
USD & Interest Rates: FED, 2yr, 10yr, and 30yr Rates

Analysis: Turnaround in rates. We want to see a continuation to lower readings, and quickly, to declare all clear in the bond market.
Outlook: Neutral to Bearish.

Why is it happening? – Level 1
USD & Interest Rates: USD vs EEM and S&P500

Analysis: USD 100 level resistance is proving to be difficult to break. The Iran-war developments towards peace have ease the pressure on the USD and allowed EEM to rally. I’m improving the outlook from Bearish to Neutral on the hopes of the Iran-war to de-escalate (no neeed to be resolved).
Outlook: Neutral (the longer the war the higher the oil & gas disruption)

Why is it happening? – Level 1
Context Investors Sentiment: Credit Spreads

Credit spreads move in tandem with the S&P, but when they diverge, that’s often an early warning signal.

Analysis: Last week we saw the spreads raise. This was a good outlook for the market. This week, the spreads continued to raise, confirming the bullish outlook.
Outlook: Bullish

Level 1 Summary

Economic Data (long-term): Bullish to Neutral
USD & Interest Rates: Neutral
Investors Sentiment: Bullish

What is happening? – Level 2
Price Action: SPX – Trend – 20 years

Analysis: Price found support at the Weekly SMA 50 (green). Support at this level occurred multiple times in the past, and could well be a significant bottom. Yet, stronger areas of support are below these levels, for example the middle of the channel (blue) and the Weekly SMA 100 (orange). These two levels are no much further below and could be reached on a “flush” bearish move that could mark “the bottom”.
Outlook: Bearish to Neutral

What is happening? – Level 2
Price Action: RSP – Trend – Weekly

Analysis: After last week’s bounce, price closed just below the weekly SMA 20. RSI is in bullish territory but PPO is not. These indicators plus the resistance found, keep our outlook bearish but slightly improved to neutral.
Outlook: Bearish to Neutral

What is happening? – Level 2
Price Action: RSP – Trend – Daily

Analysis: Last week, we identified a bottom formation in the daily chart. Market indeed rallied, but RSP closed below the daily SMA 50. There is a famous market theory that says that gaps tend to be closed. So, it is possible that we could see an attempt to close the gap until daily SMA 20. RSI is in bullish territory and PPO as well. So we are keeping our Neutral to Bullish outlook as last week.
Outlook: Neutral to Bullish

What is happening? – Level 2
Breadth & Volatility: % Stocks above 200 SMA vs. RSP

Analysis: We have jumped from last week’s 49% to last Friday’s close at 54%. Yet the bullish signal is not given as we are still below the daily SMA 50. I’m improving the outlook from bearish to neutral as the bullish signal is getting closer.
Outlook: Neutral

What is happening? – Level 2
Breadth & Volatility: RSP and % Stocks above 200, 50, and 20 SMA

Analysis: Last week, this breadth view really showed us that when there is nobody selling the market can really spring up quickly. The %A20R (green) reflects this week’s action with a 66% of the market above their SMA 20. This could act as a catalyst for further bullish price action. %A50R (yellow) and %A200R (red) have room to allow for bullish advancements.
Outlook: Bullish

What is happening? – Level 2
Breadth & Volatility: Bullish Pct. Index & McClellan Summation Index

Analysis: Both signals in synch with market action and far away from any overbought or oversold area. Changing the outlook from bearish to bullish.
Outlook: Bullish

What is happening? – Level 2
Breadth & Volatility: Ratio Low Volatility Stocks / SPY vs. SPY & RSP

Analysis: Bullish signal triggered! This is a great signal for the market. We will monitor for the signal to hold, yet historical it had. (signal above its Daily SMA 50).
Outlook: Bullish

What is happening? – Level 2
Breadth & Volatility: New Highs vs. SPY & RSP

Analysis: New Highs (gray) have spiked - due to this week’s bullish market - while the daily EMA 10 is improving from oversold levels. This setup allows for more bullish market action. I’m upgrading the outlook from bearish to bullish.
Outlook: Bullish

What is happening? – Level 2
Breadth & Volatility: VIX vs. SPY & RSP

This chart is mainly to detect market bottoms.

Analysis: The trend has changed. The volatility has dropped below 20. This normally is good for the market.
Outlook: Expect normal volatility

What is happening? – Level 2
Options: (Inverted) Put/Call Ratio vs. SPY

Analysis: The options market is telling us that we shall see high markets in the near future. There is no sign of neither panic bulls nor bears.
Outlook: Bullish

What is happening? – Level 2
Options: Gamma Exposure – SPX