The Short-Term Uptrend Continues; The SPX Reaches New Price High -

The Short-Term Uptrend Continues; The SPX Reaches New Price High

Jan 26, 2025Jeremy ParkinsonFinance0

The short-term uptrend continues, with the SPX reaching new price highs, and the number of NYSE new 52-week lows remaining at harmless levels. The PMO index has quickly moved from the extreme low to the extreme high of its range. At this point, I become more cautious, restraining myself from making many new purchases and trimming positions that look extended or weak. The bullish percents continue to point upwards which confirms the short-term uptrend. The current level of these indicators is well below the December peaks which provides lots of room to move higher before appearing to be overbought. The summations are pointing upwards nicely which also confirms the short-term uptrend. The Junk Bond ETF reached another price high. Generally, if junk bonds are doing well it favors higher prices for stocks. I’m watching the AD line to make sure that it rises along with the general market. I’ve drawn a new uptrend line and we want to see that the AD remains above this trend. The current short-term uptrend for stock prices began about when the short-term uptrend for Treasury yields ended. So, it makes sense to pay close attention to yields because if they begin rising again and challenge the recent highs, stock prices will suffer. As expected, the weekly net new high/low indicator went positive last week providing another decent buy signal for stocks. I’m watching this one carefully. Both of the market’s leading ETFs continue to look healthy, although they haven’t yet confirmed the strength of the market by hitting new highs. My view is that if these ETFs are doing well then it means that the general market is also doing well, and vice versa. It was touch-and-go there for a while regarding the semiconductor stocks, and they aren’t out of the woods yet, but the price of the ETF is definitely looking better. It really has felt to me as though the stock market has been up and down over the last six months, giving us all headaches and heart attacks, yet looking at this chart of the QQQ you would never know that. The chart looks really good and is similar to the previous chart shown above, it reflects favorably on the entire market. Bullish. Bottom Line: Stock prices continue to be in a short-term uptrend, but it is time to get cautious. I’ve already started raising cash by selling a few positions that looked extended, and next week I’ll start looking to trim positions that look a bit weak. ———- Here is a nice chart pattern of an ETF just breaking out after several years. This looks good. This one is close to breaking out. Very similar holdings to the ETF above. This one has been in a strong uptrend for some time and I still like it but with a stop under the uptrend line. The sentiment index has moved quickly from Fear to Neutral. I think this indicates that the best time to buy stocks has passed, but, on the other hand, there is still room for the market to move higher in the short term, from a contrarian point of view.

Outlook SummaryThe short-term trend is UP for stock prices as of Jan-15The ECRI Weekly Leading Index points to ECONOMIC RECOVERY as of July 2023The medium-term trend is Neutral for Treasury bond prices

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