A late-day rally on Friday saved stocks from a very nasty close on the week, but after surfing the charting landscape over the weekend, I’m not surprised to see this squeeze playing out to start the week. The billion-dollar question, of course, is whether this is another bear market rally or the start of something that could stick. To help answer this question, we defer to the market’s internals, and specifically, at the sector level. So, are we seeing the right strength from the right places, or are the bulls being set up for more disappointment? Let’s discuss Still Missing the Right Leaders Just as a quick review, there are certain sectors we see outperform when the market is bottoming, and there are certain sectors we see outperform when the market is topping. As you can see, energy (XLE) has really decided to make its presence known over the past

We’re heading into the final full trading week of the first quarter of 2025, and it’s been a tough one for the U.S. market. Other parts of the world, specifically Europe and China, are set to cap off a remarkable quarter, which begs the question: Can these trends continue into Q2? I’ll be covering my quarterly forecast and gameplan in my Trinity Trade masterclass on Wednesday, but it’s safe to say there are some more risks of volatility here in the immediate future. The bigger question beyond these market trends from Q1 is whether the economy is heading into a full blown bear market and ultimately, an economic recession.  Let’s discuss…  Every Current Short-Seller is a Future Buyer One of the trickiest characteristics of a bear market is that they often feature some of the sharpest rallies. This may sound counterintuitive at first, but it’s a simple function of short-

Spring is whispering its arrival – I can hear it in the morning birdsong and feel it in the shifting air. While this wasn’t Michigan’s harshest winter, I seem to have packed some of that cooler air with me during my recent Florida escape. There’s something undeniably hopeful about the changing seasons. Interestingly, the legendary early-20th century trader W.D. Gann noted that markets often exhibit meaningful trend changes around seasonal transitions. Not every equinox brings a market reversal, of course – but I’ve witnessed this pattern play out enough times to keep my attention particularly sharp during these periods. Today, I want to share how my experience in agriculture has profoundly shaped my approach to trading. In both fields, we operate within cycles beyond our control. And I’ve learned that success comes from moving with these cycles rather than fighting against them… Making Way for New Growth When spring arrives,

Stocks bounced from an oversold level late last week. As I settled back into my desk over the weekend, I was able to take full stock of the situation. It’s important to realize that some of the biggest rallies in stocks often occur during bear trends. These come from short squeezes. Remember, every current short seller is a future buyer, by definition. We have another important week ahead, especially with the Fed meeting. It seems as though the White House is trying to force the central bank’s hand into rate cuts, but let’s not pretend like the market is innocent here. I think the rate cuts will come, but not this week. That said, it looks like some money is flowing into a certain area of the market that could benefit from a dovish Fed. Here’s what I mean…  Still Missing the Right Leaders Last week, we saw a big

I’m wrapping up my first real vacation in 5+ years down in sunny Florida. Though my laptop only collected dust for three days, my mental batteries are now charged fuller than a Tesla at a Supercharger station. Those three days of peace gave me something rare: time to think. And perfect timing too, because this market is sending mixed signals that would confuse even the most seasoned traders. Are we diving into a recession? Is this the start of a bear market, or are we looking at the mother of all buying opportunities? Before I share my latest market insights, let’s talk about something more fundamental… The Power of Less You’ve heard me say it before: “Less is more.” In trading, more trades don’t automatically mean more profits. This principle extends beyond the markets. We live in a world of abundance, where “more” has lost its magic. What’s truly scarce?

Hello TheoTrader, The global equity realignment is still ongoing, as the market’s internals here in the U.S. tell us defensiveness is the proper position. But in reality, the selling has been pretty orderly thus far. The meaning behind this runs deep. For years, U.S.-based traders have been spoiled – all the exciting action was taking place here, after all. I’ve been talking a lot about China recently, and I still think the best opportunity for this year, going forward, is across the Pacific. But as I’m about to show you domestically, the U.S. market still has problems. It’s trying to heal, but I still need to see more.  Here’s what I mean… Healthcare Is Big… But There’s a Catch The healthcare sector, which was one of the worst-performers of 2024, has emerged as the shining star to start the year. Unfortunately, this is a better sign for bears than it

It’s been a while since we’ve uttered the words quantitative easing, and for good reason. Markets have been operating smoothly without the Fed’s infamous program, and even amidst the selling we’ve seen lately, it’s been fairly orderly. But has this orderly market carried over into cryptocurrencies? Hardly. Many cryptos staged impressive rallies after Sunday’s initial announcement from President Trump about the reserve fund, only for them to reverse all their gains the next day. So, could today’s Crypto Summit mark the start of a new era for this sector that’s becoming more mainstream by the day? Let’s discuss… Confidence Makes Markets I want to be very clear about something – I treat crypto like any other asset class or sector. Yes, the blockchain technology is special, and isn’t going anywhere, but where the majority of these coins end up is anyone’s guess. Over the past few weeks, I’ve been covering

For a while there, it appeared as though all the negative market sentiment was unfounded, but then last Friday, we saw the market’s internals deteriorate quickly, which forced me to shift my market outlook to the defensive. To be clear, I don’t think this is going to last long, but time is only one part of the equation. If the decline doesn’t last long, but drops hard, we would still be wise to stay in the comfort of cash. But just because the market is risk-off right now doesn’t mean that the trader’s work is finished. So, I want to talk about what I do during such volatility to prepare myself for an inevitable bottom… The Strong Still Get Stronger Those that follow my sessions in the TheoChat live room – especially those that are with me in the Trinity Trade – know that I’m a big believer in the

It’s been a volatile earnings season to say the least. Coming into last week, we saw positive market internals, but then, on Friday, a sudden, tremendous shift occurred. This earnings season has been marked by two-sided action. Earnings misses have been punished viciously, while earnings beats have only been modestly rewarded. Now we’re starting to see money flows into more defensive sectors of the market. This is rather concerning in the near-term.  Here’s what I mean…  Bulls No Longer Have Benefit of the Doubt An updated look at the sector leader scoreboard shows that bulls really have their work cut out for them now. Literally none of these sectors are growth or bullish-oriented. This tells us that money has been seeking safety within the market. The speed at which this developed is noteworthy. Just last week, tech was the top-performing sector, but now with consumer staples capturing short-term momentum, it’s

We just saw both the Nasdaq and S&P 500 close at their highest weekly level in history. From a purely technical standpoint, this would imply that another leg higher in stocks is in the works. But all year, we’ve heard stories about bad market breadth, negative market sentiment, tariff tantrums, a clueless Fed, and more. Yet our reliance on sector leadership telling the real story about what’s happening in stocks has kept us in the loop. And this week, I’m very excited to share this latest and greatest bullish development…  The Rising Tide Lifts All Boats Another week has passed and we have a couple key updates on the sector leaderboard. Technology has emerged as the one-week leader, which sends a strong signal that stocks have entered breakout mode. We’ve also seen communications emerge as the leader again on the 30-day and year-to-date basis, which is hardly a bearish signal.