Health of the Market  (3/1/2025)

The charts will be updated by   every Saturday. When no change to text, [NC] will be used. Click for favorite investment websites. This site is part of Charlottesville's The Center at Belvedere Investors' Forum. Note: If the latest date does not show here or on charts, try reloading the page or clearing cached images.

Health (Home) Market Status Longer Term Market Cycles System Observations Income

This website will no longer be updated.

I hope it has been helpful to all investors.

It has been operational since 2010.

The indicators for the equity market show a down market within a bull cycle in a bull trend, and in a bull market (see definitions on Longer Term page).  The Power Zone has started. After a first good week, March has been mixed. The market should have an upward bias with Fed moving rates down (although only one predicted in 2025) and good earnings expected.  Click here to check it out. There is the uncertainty of Trump policies and a tariff war.

The S&P 500 finished below 6000 this week for the first time in over six weeks. The index is now 3.09% below its record close from February 19th, 2025 and is up 1.46% year to date.

The S&P 500 index closed down 0.98% for the week, after being down 1.66% the previous week. The Nasdaq index closed down 3.47% for the week, after being down 2.51% the previous week.  The small caps closed down 1.45% for the week, after being down 3.62% the previous week.

59.8% of S&P 500 stocks were above their 200-day exponential moving averages, down from 60.2% the week before.  52.4% of these stocks were above their 50-day EMAs, up from 50.0% the week before.  31.8% of Nasdaq stocks were above their 50-day EMAs, down from 27.1% the week before (see chart). 

A Bull Cycle started the week ending 11/10/2023 after a short bear cycle fake that started 10/20/2023. The previous bull cycle started 3/17/2023. A Bull Trend was signaled 5/19/2023. A VIX Sell Alert occurred on 2/24/2025, shown on the Market Status page.  Charts for the first year of the presidential cycle are shown on the Cycles page. March is mixed.  Check out this analysis to see the what happens monthly in greater detail.

The Power Zone, the favorable time of the year, is underway. The Power Zone typically starts sometime in October and ends sometime in May. See the Market Cycles page for more. The 10-year Treasury yield is above the 2-year, but not the 3-month yield. Another inversion has occurred. An inversion generally precedes a recession by several quarters.  See more on the Income page.

[NC]  This website follows the markets and does not presume to factor in economic conditions. Buyer beware!

[NC]  Market timing is discussed on the Observations page -- does it work?  Consider dollar-cost-averaging over a month or so to gain access to the market -- if you have missed the buy-low point (which most people do). Check out this article on how the market moves during the month.  For traders, buy on the 27th and sell on the 6th.  Or buy on the 10th and sell on the 18th. 

[NC]  A three-month performance chart of the Nasdaq QQQ exchange-traded fund is below. QQQ delivers a mash-up of tech, growth and large-cap exposure that excludes financial stocks. The fund and index are rebalanced quarterly and reconstituted annually.


[NC]  The CNN Fear & Greed Index gives an interesting perspective on the internals of the market. The trend of the components of this index are important to gauge the trends of the market.

[NC]  A measure to determine if the price is too high relative to the underlying earnings is the Schiller price to earning ratio. This is the current price divided by the 10-year average of "real" (inflation-adjusted) earnings. This ratio corresponds quite well to the peaks of price as shown by charts on this site.

[NC]  John Murphy of StockCharts.com asks "Why do we look at charts?" - They provide the most up-do-date information on the state of the stock market. They may also be telling us something about the fundamental reports we won't be getting until much later. Charts track forward-looking markets, while fundamental data is backward looking. It's always safer to look out of the front window of your car while driving to see where you're going. Not the back window that shows you where you've already been."

[NC]  A chart from 1870 that shows the major market swings can be seen here.


Stock Market Action

[NC]  The large-capitalization S&P 500 index is shown with its gray Bollinger Bands below. The bands are two standard deviations above & below a 20-day simple moving average. When the price goes above or near the edge of the upper Bollinger Band a downswing in price is likely as the market is overbought. Similarly, when the price goes below the lower band, the market is oversold, and an upswing is likely. The 14-day RSI is a measure of the price momentum. Below 50 indicates negative momentum.  A divergence with price is an indication that the price trend is likely to change.

The huge advance since the August 2024 low had several big boosts from Fed announcements. The large-cap market went up to a new S&P 500 all-time high on 12/6/2024. Then a correction to that move dropped to the support line. It then went back to the usual good seasonal swing up, until the Fed said only two rate cuts are likely in 2025. Notice it broke the support line and the next support is at 5670. However, it went back up to a new high on 1/24 and 2/21/2025. After going to the new record high, it dropped significantly past it's 50-day MA.

[NC]  The S&P 500 index is a capitalization-weighted index, meaning the larger cap stocks are given the most weight in the index.  Market cap is calculated by multiplying the number of stock shares a company has outstanding by its current stock price. The stocks in the index include companies in eleven sectors to offer a picture of the health of the U.S. stock market.  However, the six largest companies make up 27% of the value of the index.  These are Microsoft, Apple, Amazon, Nvidia, Alphabet (Google) and Meta (Facebook).  To get a clearer picture of what all the 500 stocks are doing, an equal-weight index can be used.

[NC]  The chart below shows an equal-weight performance version of the S&P 500 (RSP) in red together with the capitalization-weighted version (SPY) in black. The relative strength plot at the bottom goes up when the SPY, driven by the mega stocks, is doing better than the RSP. Normally the market does better when the relative strength of the broad maket indicated by RSP is doing better that the SPY.



[NC]  Small-cap stocks, represented by the iShares Russell 2000 Small Cap ETF (IWM), are not typically traded by computerized programs. They are traded by individuals and as such offer us a look at what individual investors are thinking instead of the big trading firms. Small caps hitting a new low tells us investors are selling, continuously selling. Not a good thing for the stock market looking forward.  From FibTimer.com.

The small-cap stocks do better with lower interest rates -- see the Income page. There was a saw-tooth rise August through November.. With a shot to new highs after the election and the Fed lowering it's rate 0.25%. A severe correction to that move then occurred and then a new high!  It dropped to the 200-day MA as a swing back to large-cap stocks occurred.Then it's rise consolidated. A major drop then again occurred past the 200-day MA.


The technology-heavy Nasdaq composite index had a major drop in July that took the index down to the 200-day MA. After a bounce and correction, it went back past the high of July. The mega-tech stocks were back in favor. The Republican win caused a rally to new highs. A correction to that rally occurred with a move to the support line and trend line. It then rose to a new laa-time high on 12/16/2024 as tech stocks are back in favor. One ETF to watch is MAGS, which contains the magnificent seven stocks. Everything dropped when the Fed signaled that only two rate cuts in 2025 were likely, including the magnificent seven. The Nasdaq index broke support of it's 50-day MA. Now it seems there is a bounce off the 200-day MA. 


[NC]  Sector investing via exchange traded funds (ETFs) is popular. The traders rotate between sectors. To see how some popular sector ETFs are doing, click here for the Candle Glance of two-month charts. The charts include the StockCharts Technical Ranking (SCTR). The sector ETFs used in the Candle Glance are these.

[NC]  Here is a map of popular ETFs arranged in significant groups.  This link gives gain or loss in a week with a small chart when you hover over the group.

[NC]  The international bond market is provided by the WSJ. See the Income tab for a chart of U.S. Treasury yields. 2020 ended with the 10-year treasury note at 0.93% and the 2-year note yield was 0.13%.

[NC]  The stock markets in other countries can diversify a portfolio. To participate in these markets, the U.S. dollar can be hedged out. Click to check out the country hedged ETFs and the un-hedged ETFs.

[NC]  Note that BSE SENSEX is an India index, CAC 40 is France, FTSE 100 is a UK index, Nikkei 225 is Japan, Hang Seng is Hong Kong, DAXK is Germany, and Shanghai is, of course, Shanghai.




Dollar Influence


[NC]  The dollar ($USD) and the 10-year Treasury rate ($TNX /10) are shown in a 6-year chart with weekly closing prices. The earlier dollar rise peaked in March 2020. The quick 10.8% drop ended with a double bottom in the spring of 2021. The huge 25.7% rally since then corrected with a 12.3% drop and then a correction and consolidation of that drop.

[NC]  A falling dollar has a positive influence on the U.S. market, especially large cap multinationals, as prices for our customers overseas are less expensive. However, a weaker dollar makes product imports (some in the supply chains) get more expensive. This has a negative effect on revenue for technology companies.

[NC]  The 10-year Treasury rate rose to a peak on 10/5/2018 and 11/8/2018 closing at 3.23% both times. It hit a low in March and August 2020 around 0.5%. Now it is on a long-term rise.

[NC]  Ed Yardeni in the 2/9/19 Barron's stated that, based on his 40 years of experience, he has never found that supply-versus-demand analysis helped much in forecasting bond yields.  It's always been about actual inflation, expected inflation, and how the Fed was likely to respond to both.

[NC]  Also shown is the CRB Commodities Index, which is a measure of inflation. This index is an unweighted geometric average of prices across 17 commodities including energy, grains, industrials, livestock, precious metals, and agriculturals. 

[NC]  The price of gold is rising due to the uncertainty in the economy and the market and interest rates.







Long-Term Overview

[NC]  The Federal Reserve controls the Federal Funds Rate, which is the interest rate at which banks lend reserve balances to other depository institutions overnight on an uncollateralized basis. It also tends to effect longer-term rates. On 3/15/2020 an emergency rate cut set the benchmark interest rate between 0% and 0.25%. Then the Fed is raising the rate as shown in the chart.

[NC]  The chart gives an overview of the situation. The market had done well since the termination of the QE3 Fed bond buying, until the last half of 2015. The 10-year Treasury rates moved down as the Fed raised the over-night Federal Funds Rate in December 2015. There were a total of nine 1/4 point rate increases, the last one in December of 2018. The Fed cut the rate at its July 2019 meeting, and more cuts followed as shown below. In May 2022 the Fed started to raise the rate to slow the economy to fight inflation.The rate increases have now halted and there is speculation as to when they might start falling.  A chart of various Treasury yields since 1962 are shown on the Income tab.

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The source of the charts is located on the upper right of the chart. This page is for amusement only, and should not be taken as advice to buy or sell anything.