In order to invest or trade successfully, you have to have conviction. Conviction does not equal stubbornness. It’s very important to remain objective and occasionally question your conviction and adjust your strategy from time to time if signals warrant it. But I cannot trade personally if I believe there’s a 50/50 chance the market is going higher. That doubt will resonate with each and every swing in the market. I’ll chase at the wrong time and get whipsawed out of positions.

Instead, I evaluate those signals that work best for me – the same signals that have allowed me go against the grain and call significant market tops and bottoms over the past 5-7 years. Few were saying it was time to be long in early April, but I was quite clear. Topping signals were just as evident to me earlier this year, leading me to tell EarningsBeats.com members that I was 100% cash at the end of January. The technical confirmation of a market top occurred on Friday, February 21st. I published my belief of that confirmed market top in this same blog – again rather clearly:

You can click on this headline and read the whole story, if you’d like. After letting EB.com members know that I was fully committed on the long side in early April, because of bullish market maker manipulation, I have continued to track that market maker manipulation. Through Friday, it’s still telling me the same thing – BUY US STOCKS!

The Manipulation Continues

Listen, we’ve seen a massive run higher off that early-April low and profit taking and pullbacks will occur. That cannot deter us and should not be misconstrued as distribution ahead of a major market decline. In fact, there are a lot of technicians and market analysts talking about the big selling that’s taken place over the past week and how that will lead to further selling ahead. I completely disagree with this crew. We’ve seen almost zero selling or distribution in recent days. What we’ve seen are more gap downs, just like the ones that occurred after the March 13th low. Those opening and early morning selloffs saw subsequent buying throughout trading sessions. Check out the accumulation/distribution indicator on both the S&P 500 and NASDAQ 100 below:

S&P 500

You can see the AD line take a bit of a hit during the true period of distribution in 2025. Currently, however, the AD line is very near its all-time high. Last week (since Monday’s close), the SPY lost 15.74, falling from 594.85 to Friday’s close at 579.11. That was roughly a 2.5% pullback, but here’s what’s interesting. The SPY had gap downs the past four trading days that totaled 13.65. Nearly all of last week’s drop occurred at the opening bell. There was little selling during the trading day. We track this manipulative behavior in our “2025 Key Stocks Manipulation” excel spreadsheet, which we update for our members every Monday morning, so our members can clearly see the manipulation taking place on the SPY, QQQ, IWM, and 11 individual stocks, including Mag 7 stocks and a few others. It’s independent research and has helped us completely ignore the bearish and biased media. They’re interested in viewership and clicks and will scare the heck out of everyone to achieve their own selfish, money-making goals. EarningsBeats.com is interested in helping folks navigate a landscape designed to misinform and mislead. We’re interested in making money, that’s it. Follow the charts, not the headlines.

NASDAQ 100

The AD line exploded higher on the NASDAQ 100, mostly because Mag 7 stocks were heavily accumulated during the early-April massacre. The same thing occurred in March 2020 during the pandemic, prior to these stocks skyrocketing later in 2020. Then we saw a repeat in 2022, before a massive explosion higher in 2023. Once again, we’re seeing Wall Street’s “rinse and repeat” strategy of effectively stealing shares from unsuspecting retail traders. And once again, these stocks have been flying again.

It’s up to us to learn these lessons and not make the same mistakes over and over again during cyclical bear markets. At EarningsBeats.com, we take advantage of these selloffs before they occur. First, we move to cash. Next, we watch the stocks tumble. Third, we buy back in much cheaper at the same time that Wall Street does. Doesn’t this sound like a much better strategy? Follow what Wall Street is buying, not what they’re saying.

This manipulation applies to an even greater extent to individual stocks. One of my favorite stocks has been ridiculously-manipulated in 2025. Over the past four trading days, while the S&P 500 has been under pressure, this stock has gapped down 3.13, but has moved 8 bucks higher during the trading day. It’s one of our 12 individual stocks that we track each week and showed the most manipulation last week. Its AD line is soaring again and its relative strength vs. its industry peers has exploded higher since the first week of March. Owning stocks like this help us significantly outperform the S&P 500.

I’m featuring this stock in our FREE EB Digest newsletter on Tuesday morning. To register for our newsletter and receive this stock Tuesday morning before the market opens, simply CLICK HERE and provide your name and email address. Again, it’s free, there’s no credit card required, and you may unsubscribe at any time.

Our Spring Special, HUGE Savings

We run specials from time to time to allow new members an opportunity to enjoy our service for a year at a major discount. We started our annual Spring Special this past week and it runs through Monday at midnight. If you’d like to change your approach to the stock market and be more proactive, please consider taking advantage of this special. For more information and to Start Your Annual Membership Today, follow this link.

Happy trading!

Tom

After a very strong move in the week before this one, the markets chose to take a breather. They moved in a wide range but ended the week on a mildly negative note after rebounding from their low point of the week. While defending the key levels, the markets largely chose to stay within a defined range. The trading range remained reasonably wide; the Nifty oscillated in a 600.55-point range over the past five sessions. The volatility inched modestly higher; the India Vix rose 4.40% to 17.28 on a weekly basis. While keeping its head above crucial levels, the headline index closed with a net weekly loss of 166.65 points (-0.67).

The coming week will be an expiry week; we will have monthly derivatives expiry playing out as well. Going by the options data, the Nifty has created a trading range between 25100 and 24500 levels. The markets are likely to consolidate in this 600-point trading range. A directional bias would emerge only if the Nifty takes out 25100 on the upside convincingly or ends up violating the 24500 level. While the underlying trend stays intact, the markets are unlikely to develop any sustainable trend so long as they do not move past the 25100 level. While the markets stay in the defined range, it would be prudent to vigilantly guard profits at higher levels and rotate sectors effectively to remain invested in the relatively stronger pockets.

The coming week is likely to see the levels of 25000 and 25175 acting as potential resistance points. The supports come in lower at 24600 and 24450 levels.

The weekly RSI is at 60.14; it stays neutral and does not show any divergence against the price. The weekly MACD is bullish and stays above its signal line.

The pattern analysis shows that the Nifty has formed a trading range between 25100 on the higher side and 24500 on the lower side. This means that a directional bias would emerge only if Nifty moves past 25100 convincingly or violates the 24500 level. Until either of these two things happens, we will see the Nifty consolidating in this defined range. The Nifty has so far defended the pattern support level that also exists in the 24400-24500 zone.

Overall, the markets continue to remain in a challenging environment and face strong resistance near the 25100 level. So long as the Nifty stays below this level, it stays prone to corrective spikes, which may also keep volatility at slightly elevated levels as well. Given the current technical structure, it would be imperative that not only the sectors be rotated properly to stay invested in relatively stronger pockets, but all existing gains must also be vigilantly guarded at current levels by the investors. While continuing to keep leveraged exposures at modest levels, a cautious outlook is advised for the coming week.

Sector Analysis for the coming week

In our look at Relative Rotation Graphs®, we compared various sectors against the CNX500 (NIFTY 500 Index), representing over 95% of the free-float market cap of all the listed stocks. 

Relative Rotation Graphs (RRG) show that while the Nifty Consumption, PSU Bank, Infrastructure, Banknifty, FMCG, and Commodities indices are in the leading quadrant, all are showing a distinct slowdown in their relative momentum against the broader Nifty 500 Index. While these groups are likely to show resilience and may relatively outperform, except for the Consumption Index, they are giving up in favor of other sectors that are showing renewed relative strength.

The Nifty Financial Services Index has rolled inside the weakening quadrant. The Nifty Metal and Services Sector Indices are also inside the weakening quadrant.

While the Nifty Pharma Index continues to languish inside the lagging quadrant, the IT Index, which is also inside the lagging quadrant, is showing sharp improvement in its relative momentum against the broader markets.

The Nifty Realty, Auto, Midcap 100, and Energy Sector Indices are inside the improving quadrant. These groups are expected to continue bettering their relative performance against the broader markets.

Important Note: RRG charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.  

Milan Vaishnav, CMT, MSTA

Consulting Technical Analyst

www.EquityResearch.asia | www.ChartWizard.ae

My main question going into this weekend was, “Will the S&P 500 finish the week above its 200-day moving average?” And while the S&P 500 did indeed finish the week above this long-term trend barometer, our main equity benchmark is now within the gap range from earlier this month.

We’ll get to that crucial S&P 500 chart a little later, but first, I’d like to explain why gaps matter, why the price action post-gap is so important, and then apply these lessons to the SPX.

The “Gap and Run” Scenario Suggests an Influx of Buyers

One of two things tends to happen after a gap higher within an uptrend phase. The first scenario, which I call a “gap and run” pattern, is when additional buyers come in to push the price even higher.

Microsoft Corp. (MSFT) features this gap and run pattern, with the gap higher on their Q1 earnings report followed by an additional appreciation in price.  Basically, investors are not afraid to accumulate more MSFT, even after the stock gapped up from $395 to $430 overnight.

Did you catch our recent webcast, “Sell in May 2025: Seasonal Strategy or Outdated Myth?” We looked at the performance in May-June-July since the COVID low, then made a comparison between 2025 and the first half of 2022, when a break below the 200-day moving average was a sign of much further deterioration to come.  Check out this excerpt on our YouTube channel!

Shares of Howmet Aerospace (HWM) demonstrated a similar gap and run pattern recently, although this example is perhaps even more significant because the gap took the price to a new all-time high! Again, we can see that additional buyers are coming in and accumulating more HWM, fueling further gains after the gap.

The “Gap and Fail” Pattern Shows a Lack of Willing Buyers

Sometimes, a chart will show a very different path after the gap, forming what I’ve termed a “gap and fail” pattern.  Unlike the previous examples, here you’ll see that a lack of willing buyers causes the stock to quickly reverse lower into the range of the price gap.

In the case of semiconductor producer Monolithic Power Systems (MPWR), the gap higher earlier this month was followed by two additional up days, which propelled the stock above its 200-day moving average. This short-term pop higher was followed by a sudden downside reversal, representing an exhaustion of buyers after the upside gap.

First Solar (FSLR) is demonstrating a similar pattern to MPWR, with a gap higher which pushed the stock just above the 200-day moving average to test the 38.2% Fibonacci retracement level. A couple days later, FSLR was back below the 200-day moving average, followed by further deterioration that eventually closed the gap from earlier in May.

The S&P 500 Could Test Its Own Gap Support

So what do those example charts have to do with the S&P 500? Well, the SPX traded higher for about a week after the upside gap in early May. We’ve drawn a green-shaded range to highlight the gap from around 5725 to 5780. This gap includes the 200-day moving average and also lines up with the late March swing high.

I see the S&P 500 as in a constructive pattern as long as it remains above this price gap range. If we can see an upswing after this week’s pullback, then this could just be a pause within a broader recovery phase for the S&P.

On the other hand, if we see any further price weakness from the major benchmarks next week, then the chart of the S&P 500 will start to look pretty similar to other “gap and fail” charts that confirm a lack of willing buyers. If we do see that downside follow-through next week, we’d expect further deterioration to the 5500 level, representing a 50% retracement of the February to April selloff phase.

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!

David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC

marketmisbehavior.com

https://www.youtube.com/c/MarketMisbehavior

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

The bullish signals stacked up in April and May, but most long-term breadth indicators are still bearish. SPY and QQQ showed signs of capitulation in early April and rebounded into mid April. A Zweig Breadth Thrust triggered on April 24th and several other thrust indicators turned bullish in May. We also saw SPY and QQQ break their 200-day SMAs. TrendInvestorPro is tracking these signals and relevant exit strategies.

These are bullish indications for large-caps and, perhaps, stocks in the top half of the S&P 500. However, I would not call it a bull market until participation broadens. The chart below shows the S&P 500 EW ETF (RSP) and S&P MidCap 400 SPDR (MDY) moving back below their 200-day SMAs. The S&P SmallCap 600 SPDR (IJR) never came close and remains a big laggard.   

The bottom window is perhaps the most telling. It shows the percentage of S&P 1500 stocks above their 200-day SMAs. This long-term breadth indicator did not cross above 50% in May. Except for a 1-day dip on January 10th, this indicator was above 50% from December 2023 to February 2025 (bull market). It broke below 40% on March 10th and has yet to fully recover (bear market).

At the very least, a move above 50% is needed to show broadening participation worth of a bull market. This is how the market moves from bullish thrust signals to a bull market.  Until such a move, we are still in bear market mode and risk remains above average for stocks. Note that the S&P 1500 includes large-caps (500), small-caps (600) and mid-caps (400). Around 2/3 of components NYSE stocks and 1/3 Nasdaq stocks. It is a truly representative of the broader market.

Exit strategies are just as important as entries. The Zweig Breadth Thrust and the 5/200 day SMA cross provided entry signals in April and May. We now need an exit strategy. TrendInvestorPro put forth exit strategies for both signals and these are updated in our reports. This week we covered the gap zones in SPY and QQQ, long-term breadth signals, big moves in metals and continued strength in Bitcoin. Click here to take a trial and gain full access.

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In this insightful overview, Grayson dives into StockCharts’ powerful scanning capabilities. He shows you how to navigate the markets quickly with the sample scan library, and automate your stock screening with the scheduled scans feature.

This video originally premiered on May 23, 2025. Click on the above image to watch on our dedicated Grayson Roze page on StockCharts TV.

You can view previously recorded videos from Grayson at this link.