Gains in US Equities this week constitute a bullish short-term breakout that should help SPX extend gains up to 5500-5600 before some stalling out (potentially by the end of the month). While this short-term breakout is certainly helpful towards helping Equities extend higher technically, the weekly downtrend and bearish momentum will likely take time to reverse. Thus, a two-step forward, one-step back type framework is likely to be in place in the foreseeable future. Despite Equities likely extending gains higher in the months ahead, the next month likely could prove quite choppy, technically speaking, and might not trend up as quickly as market bulls might expect. However, it does look likely that the early April lows represented an important low for Spring 2025, & shouldn’t be tested in a bullish framework in the coming months. Going forward, SPX 5500, QQQ-466.43, and DJIA-40,661 remain key areas to exceed and have confidence in a larger rally back to new all-time highs. Outside of Equities, the US Dollar looks to have begun a minor bounce this week. However, trends in both DXY and TNX should prove bearish in the months ahead, so not much of a rally is expected in either.
Overall, despite the fading of early gains in US Equities after Europe’s close, Wednesday’s follow-through of Tuesday’s breakout remains technically positive, and market breadth managed to expand by a 3/1 bullish margin.
Technology managed to dominate performance by rising more than 2.50% on the day (Equal-weighted Invesco Technology ETF rose by +2.52% today). Moreover, gains in four other sectors eclipsed 1% in Wednesday’s trading: Financials, Healthcare, Discretionary, and Communication Services.
Bottom line, as shown on the daily chart below, SPX still successfully achieved a breakout above the downtrend from early April, despite the late day weakness. I view this as a technical positive, and should drive price higher up above 5500 without much trouble before any stalling out.
S&P 500 Index
Shorter-term view since March shows reason for optimism with regards to SPX
Wednesday’s SPX close at 5375.85 represents an 11.1% gain since the intra-day bottom of 4/7/25. This is a lot more positive than what many might expect, given the lack of meaningful.
While the percentage of SPX stocks above their respective 200-day moving averages(m.a.) still lies at roughly 25% as of Wednesday, it’s constructive to see the short-term progress in breadth on percentage of SPX names above 20-day m.a. rise above 35%, from lows of approximately 2% made nearly two weeks ago on 4/7.
As shown below, the multiple open gaps as seen on hourly charts are generally a very good sign for “Market bulls”, and the Technology SPDR sector ETF (XLK 1.48% ) successfully broke out above its entire trend from February. (Shown on today’s Flash Insights.)
Overall, I expect that SPX shows further strength into end of week, as key Technology names such as Service Now, Texas Instruments, Lam Research all traded higher following earnings after Wednesday’s close in the aftermarket trading session.
S&P 500 Index
Silver’s snapback rally likely stalls out and might not immediately exceed March peaks
Silver’s early morning breakout is diverging from Gold sharply, but does not constitute the start of meaningful intermediate-term outperformance vs. Gold in my view (at least not yet, this will likely not happen until June/July into Fall of this year).
Silver futures rose nearly 2% today, exceeding former highs, and might lead Silver futures to reach $34-$34.50 over the next 2-3 days. However, this should constitute a high-risk area for Silver, technically, and would then likely peak out before exceeding March highs and beginning some consolidation.
The good news for “Silver bulls” is that this move has been a five-wave advance off the early April lows. Thus, following a move from potentially 34 down to 32 at a minimum or potentially 31-31.25, I expect a push back to new highs for Silver. (Roughly, a move to 34-34.50 in Silver futures might lead SLV to move to 31-31.25, but not above 31.50.)
Overall, it’s arguably right to be bullish on Silver on an intermediate-term timeframe. However, this likely does not prove to be a straight shot to new highs and could take time.
Silver Futures
Silver is making good headway this week vs. Gold; However, the larger period of intermediate-term outperformance remains elusive
The relative chart below plots a ratio of the iShares Silver ETF (SLV -1.67% ) vs. the SPDR Gold Trust (GLD -1.05% ), which broke down sharply to yearly lows into early April.
While Wednesday’s snapback rally and breakout in Silver were seen as minor technical positives on an absolute basis, neither daily nor weekly charts show the successful completion of DeMark-based exhaustion, which might signal a meaningful bottom in the ratio of silver to Gold. (Note that this is now present on a monthly basis, but not confirmed.)
In plain English, I’ve often found it more helpful when attempting to project intermediate-term turns to wait for an alignment of Daily, weekly, and monthly exhaustion signals in unison. At present, this has not happened just yet, and momentum is still under pressure.
Thus, I feel that it’s early to expect meaningful outperformance just yet of Silver over Gold, but do embrace this breakout today as being positive for the intermediate-term picture. Bottom line, Silver likely could stall out by the end of the week at fractionally higher levels before beginning to consolidate into May. Stabilization in the fixed income space will likely bring about interest rate cuts in 2H 2025, and this can allow for metals to gain as the Dollar and Treasury Yields both fall. At present, we’re still in a time where a short-term bounce is ongoing for Yields, and the US dollar has begun its own minor bounce today.
SLV/GLD
US Dollar bounce won’t prove too severe nor long-lasting before rolling back over to new monthly lows
DXY has shown evidence of stabilizing, given some of the improvement in risk sentiment, with a less confrontational stance regarding trade tensions with China and Fed Chairman Jerome Powell.
Wednesday brought about selling pressure in the Japanese Yen, Swiss Franc along with Gold which all dropped as Equity prices rose.
Importantly, there was some evidence in CFTC data of US Dollar positioning starting to shift. However, Citi FX’s pain indices (seeking to estimate market positioning by tracking currency-manager returns) still show US Dollar longs as being a crowded trade.
Technically, the breakdown to new yearly lows made DXY oversold, but quite bearish in terms of technical structure. Furthermore, no evidence of downside exhaustion was present on weekly nor monthly basis on DeMark indicators to suggest a material bounce.
Thus, given no material change in the fundamental backdrop along with technical trends still being quite bearish for USDCHF, USDJPY and bullish for Gold, I see this being a temporary bounce in the US Dollar before this pulls back to new monthly lows.
If/when this can start to lose its positive correlation with the SPX, then the Dollar could weaken as SPX gains ground, which would fit with normal historical trends. Technically speaking, I anticipate gains to 101-101.50 in DXY before a period of weakness takes DXY down to the mid-90s.
U.S. Dollar Index
NVIDIA (NVDA) 5% bounce is constructive, but much work remains to be done
NVDA 4.25% technicals show some minor stabilization, and today’s +5%+ gains are certainly a short-term positive. However, its two-month downtrend intersects near $110 and shows still quite a bit of work to do before this can start to trend higher (Vs thinking a few days of gains constitute just a bounce).
I am optimistic on NVDA’s intermediate-term prospects technically, but feel a meaningful move higher will indeed take time. Initially, $109-$111 is the upside area of resistance, and the ability of this to be exceeded would then help this begin to scale higher towards $120, which approximates the 50% retracement of its entire pullback from January into April.
Overall, it’s right to be encouraged by today’s move while also cognizant of the challenges that lie ahead, given the current downtrend and negative weekly momentum based on popular technical gauges like MACD. Given its weight within SPX and QQQ, NVDA will continue to be a stock to watch carefully for evidence of technical progress, or lack thereof, given its influence. At present, I expect that today’s gains will likely lead to upside follow-through to near $110.
NVIDIA Corporation
