Additional proof that US Equity market lows are likely in place Array ( [cookie] => 6b637f-7093f2-434a00-db4135-f066f1 [current_usage] => 1 [max_usage] => 2 [current_usage_crypto] => 0 [max_usage_crypto] => 2 [lock] => [message] => [error] => [active_member] => 0 [subscriber] => 0 [role] => [visitor_id] => 147161 [reason] => Usage under limits [method] => ) 1 and can accesss 1

Markets look to have bottomed on 3/13, coinciding with the surge of fear into mid-March. The resulting bounce happened on much higher than average breadth and volume, making a tell-tale technical low that many refused to believe given the lack of proper downside volume capitulation. Technically speaking, the rebound in momentum as a factor looks important, as this group was hit adversely hard in recent months. Furthermore, the combination of cycle composites bottoming coinciding with fear having spiked to multi-year highs was an important development. As discussed, most “Magnificent 7” issues experienced short-term deterioration only and had failed to break weekly uptrends. Moreover, SPY, QQQ, and DJIA have now successfully exceeded their downtrends created in February, and the Elliott-wave structure looks positive for a meaningful move up into April. While it’s difficult to call for indices to carry straight higher back to new all-time highs without any meaningful backing and filling, I feel like any stalling out and pullback happens from much higher levels and likely begins sometime in May. Overall, it looks right to favor Growth stocks and overweight Technology, Financials, Industrials, and Consumer Discretionary.

Our recent low coincided with quite a few important Technical developments:

1. Consumer Staples sold off sharply most of the week into the 3/13/25 low. Seeing a defensive sector like this, which had previously been rallying during the stock market correction, suddenly start to lose ground looked to be a key sign that a low to the decline could be near.
2. NYSE Advance/Decline surged off the lows for two consecutive days, registering more than 90% Advancers/Declining issues, which is rare and proved bullish.
3. Equity Put/call ratio finally pushed above 0.90 into mid-March. This was roughly in-line with levels that have marked Stock market lows over the last year.
4. Advance/Decline in volume spiked to show more than 80% of the volume on the upside back on 3/14/25.
5. VIX, the CBOE Implied Volatility index, started to turn lower ahead of the broader market bottoming. It’s three sharp down days right ahead of SPX bottoming, which proved important despite SPX also closing lower until 3/14/25.
6. My cycles composite bottomed Friday, 3/14/25.
7. Weekly charts of AAPL 1.25% , META 1.31% , GOOGL 1.81% , AMZN 1.22% , NFLX 2.71% , along with QQQ had all pulled back to test, but not violate, intermediate-term uptrends from 2022/2023 lows.
8. AAPL, which remains one of the most important stocks within SPY and QQQ, has now managed to recoup former lows at $219.38 (1/21/25).  This is a bullish development, technically speaking, and should begin to drive this stock higher back to new all-time highs.  Given AAPL’s weight in SPX and QQQ, this is certainly a technical positive.

S&P 500 Index

Factors support a big comeback into Momentum, which started last week

Today’s acceleration in Services PMI offset the deterioration in Manufacturing and has resulted in Momentum stocks surging back after a difficult start to the year.

As shown, despite being down -6.6% YTD, Momentum led all other factors in the last week, higher by +2.12%, and has trounced performance in other factors over the last 10 years. Today’s 1-day return of +3.05% is encouraging.

Dollar positioning has turned bearish

It’s interesting, but unsurprising that US Dollar positioning has completely reversed its bullish bias since January 2025, two months ago when positioning reached the highest levels in over 5 years.  Such hugely bullish sentiment coincided with the meaningful peak in the US Dollar and now speculators hold $932k in Bearish bets on the US Dollar.

While technicals remain bearish despite last week’s minor bounce, I suspect that if/when DXY nears last Fall’s lows coinciding with bearish speculation reaching 2021 lows, then a more serious upside reversal might be in order. At the current level, the bearishness is just a bit under Neutral and not meaningful, but extremes tend to be important from a contrarian perspective.

Overall, both Treasury yields and the US Dollar will likely continue to exhibit bearish intermediate-term trends into summer/fall 2025.

Aggregate USD position, non-commercial traders

TSLA breakout worth following as this has made excellent technical progress off the lows

TSLA 3.79%  has exceeded 3/14/25 peaks, bringing this to the highest levels since early March. The stock is trading higher from today’s open of $258.08 and was the top-performing issue of the entire SPX today, showing the 2nd best performance out of the SPX last Friday on the breakout. This arguably should help to drive the stock higher to the aforementioned areas of resistance, near $292 initially, then up to $325, technically speaking.  Momentum and volume have begun to spike on these gains (Last Friday showed the highest volume in more than a week following maximum pessimism.) Overall, I expect this move higher is underway, and TSLA will remain part of UPTICKS. I expect this to push higher into late April.

Some reasons for positivity are as follows: 

1) The short-term triangle pattern that’s contained TSLA’s price action in the last couple weeks has been broken to the upside, which is bullish.

2) Short-term RSI has risen from oversold territory to near 40 in the last couple of weeks, an encouraging boost in near-term momentum.

3) TSLA’s move to multi-day highs today is set to occur on higher volume by today’s close than happened in any of the prior days this week.

4) The level of pessimism surrounding Musk is not unlike Retail sentiment around the US Stock market at a time when the company plans to surpass 10 million vehicles next year, which will all be capable of Autonomy.

5) TSLA retraced a perfect 78.6% of the prior advance from last April, a key level as it also lines up with last October’s lows.

6) Cycle composites suggest a big rise in TSLA from late March into late April/early May, initially before some minor consolidation in late May. (I suspect this will bring the stock down to slightly higher lows than what happened in March.

Tesla, Inc.

NVDA push above last week’s highs jump-start it rally back to $133 initially

NVDA -0.72%  push above last week’s highs is also constructive towards thinking this is beginning its move back to all-time highs.  Initial resistance should lie near 133 which represents a 100% alternative extension of the move off the 3/11 lows and also represents the trendline connecting January to February peaks. 

The 61.8% Fibonacci level of NVDA’s high to low swing hits near 134.50 so this area also has importance. Thereafter, if NVDA exceeds its downtrend from January highs, this will help momentum begin to accelerate as it runs up to 151. Overall, a big positive.

NVIDIA Corporation

AAPL pushing back up above $219 is a big technical positive 

AAPL which remains one of the most important stocks within SPY and QQQ, managed to recoup former lows at $219.   This former low was significant in forming minor lows from last October, November 2024, as well as mid-January 2025. 

This is a bullish development, technically speaking, and should begin to drive this stock higher back to new all-time highs.

I suspect it’s begun a rally up to $228 initially, then $240-$242.  Above $242 would allow for a surge to test and exceed all-time highs.

Overall, while a weekly close would mean more than a daily close above mid-January lows of $219.38 (1/21/25), the act of having reclaimed these prior lows and closing near the highs of its daily range are a positive for follow-through this week.

Apple