In our February market update, we noted some early signs of weakness starting to build beneath the surface of the market. This week, we are revisiting the technical backdrop of the S&P 500 to see how those trends have developed and what investors should be watching next.
If you prefer to read the highlights, here is a breakdown of what we cover in this week’s video:
The stock market is constantly moving, but price alone doesn’t always tell the whole story. In this update, we walk through how the S&P 500 has developed since last month. We take a close look at recent price action, shifting momentum, and the key support levels that we are monitoring to see if the current trend will hold.
You cannot evaluate the health of the market just by looking at the index level. We spend time diving into market breadth—specifically looking at the number of individual stocks currently trading below their 200-day moving averages.
Why does this matter? Because the “average” stock can often tell a very different story than a cap-weighted index like the S&P 500. When market breadth diverges from the main index, it can be a leading indicator of future volatility or a shifting trend.
To wrap up this week’s video, we highlight the U.S. dollar in THOR’s Focus Chart. We explain why the 100 level continues to stand out as a critical area of resistance and what a breakout (or rejection) at this level could mean for broader global markets and your portfolio.
Price has caught up with the MACD and Moneyflow which was diverging in our last update.
Short term SPY market breadth is at an inflection point.
Long term market breadth is also at an important inflection point.
US Dollar has traded below an important $100, which has set up a new resistance level.
Keeping an eye on these technical indicators is a core part of our investment management process. We believe that understanding both the macro environment and the underlying market mechanics helps us make more informed, objective decisions for our clients.
