Happy New Year and hopefully you’re sitting on a big pile of equity returns from 2024 and eager to keep it going in 2025. If you didn’t make money in 2024, you might want to reconsider your investing approach, big time. Step back, look at what worked and what didn’t. Be honest with yourself and make the necessary adjustments.
Although 2024 was strong, the back half of December showed weakness with multiple down days on strong volume. Now we sit at a fairly significant inflection point. The trading range is tightening up horizontally and SPY is sitting on horizontal support. Do we roll over and take the next leg down? Maybe. Let’s see how the rest of the week plays out. In the meantime, I’m looking for discounts on quality stocks.
SPY: Watch 584 for support
SPY Daily
The SPY weekly chart paints some underlying weakness that has been there for a while. Although we’re still in an uptrend and holding above EMA21, RSI and MACD have been weakening for quite a while. The RSI peak was in April with another in July that was slightly below April. Since then, SPY has been up, but RSI has drifted flat to down (divergence). The same can be said for MACD. Also note the volume has weakened, as well. I interpret this as a fairly strong break of the uptrend to the downside more likely than a continued move up. I’m not ready to go to cash, but my positions all have trailing stops so I don’t get caught bag-holding.
SPY Weekly
