Market Technician. Active Trader. Passionate about Investor Education. Part-time π coach. Father to FOUR boys. Co-founder of @MarketScholars π¨βπ»ποΈππ°π¨βπ
Here's something to think about:
On January 5, 2024, $SPX broke a 9-week winning streak that produced a 16.2% rally with a 2.0% decline before moving higher 7 out of the next 8 weeks. Short-term sentiment (red and blue lines) on the Market Forecast looked strongly bearish and the intermediate (green) line was on the verge of crossing below Market Sentiment (orange line) - look at 1st chart.
Fast forward to today. $SPX broke a 9-week winning streak that produced a 20.0% rally with a 3.0% decline. Short-term sentiment looks bearish and the intermediate line is about to break below long-term Market Sentiment - look at 2nd chart.
Both rallies occurred AFTER deeper-than-normal pullbacks (more than typical 5%) that didn't produce extended runs below the 200-day SMA.
Why did stocks fall January 2-5, 2024? You can almost use the same headlines from this past week. Mega cap and chip stocks fell big. Yields rallied in part because of a strong labor market report on January 5, 2024 that reduced Fed rate cut odds.
Sound familiar?
The momentum line for $NDX hit extreme lows but the near-term line stayed out of the lower-reversal zone. This is a positive sign for the tech-heavy index as extreme lows on the momentum line that DON'T lead to pullbacks tend to be really good bounce opportunities.
https://t.co/S2HTrrJhR5
$QQQ $SPX $VIX $TNX
Micron has plummeted 20.7% in the last three days. (Look carefully!) In the process, it gave back every bit of its gains of (checks notes) the last two weeks. And although the 20%-plus decline puts in a media-defined "bear market", it still sports a 174% year-to-date gain.
All the other instances where $SPY has more than 1.5 times its 30-day average volume and we WEREN'T in an intermediate decline (orange boxes), usually ended up being buying opportunities.
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I get asked why would you say a 20% decline in this instance is just "noise" and not even a pullback where the traditional definition would say it's a bear market.
It's because of the rally that preceded the 20% decline. In this case, to get to the level of 24% ABOVE the 50-day SMA, $XLK rallied 55.4% in just 44 trading sessions. That's a tremendous rare rally that literally has NEVER happened before in the history of the ETF.
In fact, $XLK had 12 2% daily gains since March 30. That's 12 out of 43 days, or 28% of all trading sessions. Before that, $XLK had 12 days of 2% gains or more from April 22, 2025 to February 6, 2026 - or 200 days (6% of all trading sessions). And, that was also considered a rare move for that timeframe (only 3 other times had bigger 200-day moves all time)
So, a 20% drop in these conditions is much different than "normal."
Not all 10% declines are corrections. $XLK closed Tuesday 24% ABOVE the 50-day moving average. $XLK is down 9.04% in the past 3 days and is STILL 10.61% ABOVE the 50-day SMA.
Pullbacks break the 50-day SMA. $XLK can essentially drop 20% and STILL not even be in pullback mode. It would just be noise.
For context, $SPX has only been 15% above the 50-day SMA ONCE EVER in 1982.
Not all 10% declines are corrections. $XLK closed Tuesday 24% ABOVE the 50-day moving average. $XLK is down 9.04% in the past 3 days and is STILL 10.61% ABOVE the 50-day SMA.
Pullbacks break the 50-day SMA. $XLK can essentially drop 20% and STILL not even be in pullback mode. It would just be noise.
For context, $SPX has only been 15% above the 50-day SMA ONCE EVER in 1982.
Not all 10% declines are corrections. $XLK closed Tuesday 24% ABOVE the 50-day moving average. $XLK is down 9.04% in the past 3 days and is STILL 10.61% ABOVE the 50-day SMA.
Pullbacks break the 50-day SMA. $XLK can essentially drop 20% and STILL not even be in pullback mode. It would just be noise.
For context, $SPX has only been 15% above the 50-day SMA ONCE EVER in 1982.
All the other instances where $SPY has more than 1.5 times its 30-day average volume and we WEREN'T in an intermediate decline (orange boxes), usually ended up being buying opportunities.
$SPX is still up >23% over the past 12 months. So, if it lost $2T today alone, we have to keep in mind that it has gained nearly $20T in market cap in the past 12 months going into today.
$SPX lost 200 points today exactly. But, it had gained 1645 points in the past 12 months going into today
What just happened?
The S&P 500 just erased nearly -$2 TRILLION of market cap just hours after 3rd strongest US jobs report in 18 months.
Meanwhile, Bitcoin is officially down over -50% from its record high in October 2025.
What's happening? Let us explain.
(a thread)
Definitely a healthy, thriving economy:
The second highest performing basket of stocks so far this year is TECH COMPANIES THAT MAKE NO MONEY AND HAVEN'T TURNED A PROFIT
@TeeplesCY Maybe because all of our clergy are unpaid and we know them well since they're all our neighbors and we end up essentially "taking turns" so to speak in leading local congregations through so many different leadership callings, more than just the bishop