Hey everybody, it is Friday the 11th of April 2025 and we had a positive week for equities here. S&P was up 11 percent, the NASDAQ up 7 percent. So big moves continue to be the theme here. Large percentage gains were now 12-13 percent off the low for the year which occurred on Monday.
So let's take a look at these charts and not get enamored with those numbers but make some sense of it. So this is where we are right now. Let's take a look at what happened this week for the SPY.
What I want to do is just change the scaling a little bit so we can see it a little bit better. Monday, of course, we had the gap lower and it looked like the end of the world. And then as the market got back above the daily volume weighted average price, the buyers took control.
They didn't hold control. You know, they held it for the day. Tuesday, we saw a little bit of selling.
And then on Thursday, we saw a beautiful test of that anchored volume weighted average. price from the beginning of the week. And that's where this strength has come from. I was kind of thinking that we might get rejected by the anchor off of the new tariff news that occurred. That had been providing some supply, but we were able to push a little bit higher here today.
And we did not have what I thought we would, which was an inside day. Instead, we made a slightly higher high. So that doesn't mean we're out of the woods with this market. There's a few things, as always, to consider. Multiple time frame analysis, first and foremost.
We still have a declining 20-day moving average. That means highly suspicious. We still have a declining 50, and the 200-day moving average is declining as well. This is where we were 200 days ago, right here. We'll get rid of this data and that 200-day moving average calculation next week.
So unless we move up into this zone, which is possible, that would mean that 200-day moving average will continue to decline. The way I look at it is, you know, numerous things. One, here's our anchored view app from the all-time high that was made this year. And from that failed move, we saw a fast move lower.
That ties where we see the 20-day moving average right now. So that looks like a likely area that if this market can continue to move higher, that supply will be found there. I don't think that we're through with all this indecision in the market. What I just drew in there was the retracement, the Fibonacci of...
this being the high down to the year-to-date low. And we've retraced a little bit more than 38.2%. A 50% retracement occurs in that general, you know, 555, 55 zone where we have the anchor off the all-time high in the 20-day moving average. So it's difficult for me to trust this market with a declining 200-day moving average. I've gone over a number of examples of that.
We're getting a bounce. I believe it's a bounce within a downtrend. You can say the volume was impressive. And...
More important than the daily volume. So for instance, a lot of people will look at it and say, hey, we saw big volume on the way down, biggest volume at the turning point, but feeble volume on the rally. That's not what's important.
What is important is the volume weighted average price for the week. The average price that the SPY traded at this week is right here at about 515. So about 20 points lower than where we are. That will be an important level.
next week and in the coming weeks as well, that anchor from the year-to-date low. I always keep a year-to-date anchor, especially if it's relevant on these charts. So we have a rising five-day moving average. In fact, if you look at the trading view chart, here's what we saw.
Yesterday, we had a yellow. It turned green today. So let me just adjust that a little bit better. So all these markets have a green here, which means a higher high above a rising five-day moving average. That is, we're above the rising five-day moving average and the intermediate term trend is higher.
But it's hard to trust it. So I look at this and say, you know, we've seen huge rallies in downtrends previously with declining moving averages. And maybe we get one like this that even goes and makes a slightly higher high above this level. But I still wouldn't trust it while we have these moving averages heading lower. So.
I'm taking it day by day. I still view it mainly as a day trade market. Occasionally, you know, some of these trades, if you get a good profit in them, you can, you know, hold them a little bit longer overnight.
But, you know, NASDAQ, same story, 38.2% retracement almost perfectly here today. We've got that declining 20-day moving average, which is also the two-year anchored VWAP. And right above that, near the 50% retracement, we have the anchor off of the all-time high.
So these are levels of potential supply. Let me go back to the SPY for a moment because what I had drawn in last night for subscribers was I thought we were probably going to have an inside day. But I said, you know, what might happen is we rally up and make a slightly higher high. And then next week, if we still see all this uncertainty in the market and we get stuck below, so we, you know, we pull back to the five-day moving average right here.
And then if we get stuck below it like this, then I think you're going to see another leg lower. Now, hopefully that doesn't happen. I like it better when the market goes higher here as well. But because we have these things overhead that are telling us don't trust this rally, trade it.
That is at least the way I see it. Raise your stops. If you're an investor and you bought on Monday, congratulations.
You had a higher low right here. You had another higher low right here. Don't wait for a new low to set your stop.
Use the definition of this emerging trend, which is higher highs and higher lows. Just because I don't trust it doesn't mean it might not just rip right higher. I'm always open-minded to that.
That's why I'm a trader, because I don't want to get locked in to a longer term belief. My longer term belief in the Russell 2000 all year has been correct, which is we're in a horrible decline. We're below the declining 20, 50, 200-day moving average, and all these rally attempts have failed so far. Is this going to be the low? It's quite possible that it is.
But I still don't think it's likely. We're still below the 20 and 50-day moving average. So maybe we get some further bounce in here.
You know, at this point, I think on Monday, what you'd want to see if you're looking for a bounce would be, you know, pull back down in here, buy some strength. And then initial stop here, if and as it makes a higher low, then you raise your stop up under there. And listen to the message of the market.
If it runs up to this level quickly on partial. Have your stop very tight because those types of moves, whether it clips a prior high that was, you know, extended, will often see at least some retracement. You can always, you know, buy it back if it pulls back further. But it's nice to have a little bit of cash on the sidelines if that's, you know, the way you're trading it.
I'm still, like I said, I don't know how else to explain it. I'm still highly suspicious of this market overall. Here's the anchor from the year-to-date high in the semiconductors.
There's the 20-day moving average. We came close to that. And again, we've got the pattern of lower volume on the rallies. Don't let that be your guide.
Let the anchor from the low be your guide. That's much more important because while the volume is diminished here the last few days, the buyers are in control. This is going to be a very important low right here. So if we break back below that, and I wouldn't say, It always depends on how it gets there.
If it just breaks down Monday morning, well then, if it then does this and gets trapped, then you would be looking for short sales, but not if it does so immediately. In other words, you don't want to set your stops under there. You want to give it at least five minutes in the morning on Monday. And by the way, I'll be talking a lot more about individual stocks Sunday evening live on Twitter.
It will be there. It is recorded and is always shown on Twitter on the recording. If you're not on Twitter, my handle there is at Alpha Trends.
And the biotech's got a little bit of a bounce here. These guys are closing in on the lows from back here in 2019, 2020, 22, and 23. So they've undercut every single level so far. All kinds of people have told me all the way down that we're at a low.
that we've seen the low, and maybe this is enough volume that it is a low that at least holds for a little while. I would like that, actually. But again, do we trust this rally attempt here?
What about the anchor from this recent high right here? That's a level of interest, and it ties this little area that has seen supply as well. And you look at it and say, we've got these lower highs and lower lows.
And again, I will point out always that. The lower highs and lower lows below a five-day moving average, then we see a higher low. And if we see a higher high, everyone's going to call that inverted head and shoulders pattern. The only thing that matters is not the name of the pattern, but it just represents a changing of lower highs and lower lows to higher highs and higher lows. That's all an inverted head and shoulders pattern is.
Anyways, biotechs remain the worst. They're looking like they can perhaps get some further bounce. Be tight with your stops. Don't give it too much room. to go against you because the path of least resistance on the primary trend is still lower.
Financial stocks got a little bit of a bounce here today. I asked last night on Twitter saying, you know, do you really expect that JP Morgan is going to turn the financials around? And I don't think they have so far. It's good that they're getting a bounce and they added to that on these earnings right now. But we still have the potential for a bigger source of supply, in particular up in here on JP Morgan.
up in this zone where we have the anchor from the election, the year-to-date anchor right here, and the declining 50-day moving average. If you're a long J.H.P. Morgan, know where your stop goes. I don't think it's going to, you know, I look at a weekly chart.
And what I see on a weekly chart is pretty simple here. You know, just basic things. What's the definition of a trend? Well, it's higher highs and higher lows. And as long as we have that pattern, then we want to buy strength after dips.
When we see lower highs and lower lows, what we want to be on the lookout for is to sell short after rallies. If you don't short stocks, that's fine. But I look at this and say, if you're long JP Morgan, just be aware. that as it gets back to maybe your break-even cost or whatever it may be, we're coming into this prior band of support, which again, you know, it's the pattern of higher highs and higher lows got replaced with lower highs and lower lows.
And that's where people call this inverted head and shoulders or this head and shoulders pattern. So the name of the game, if you're long this stock is to say, how bad did you feel down here? Did you say, well, Hey, I believe in Jamie Diamond and JP Morgan chase what they're doing over there. I bought more.
Great. Protect it. But if you're feeling like, wow, this is really awful, protect your gains right now on this bounce because longer term market structure suggests that this stock will continue lower. And I would not be surprised.
I'm not calling for it, but I wouldn't be surprised to see it come down to the anchor off of the 2023 low, which would be down here near 177. And just to keep it relevant, you know, OxyP, I've been talking about this one for over a year in terms of. making lower highs and lower lows below that declining 200-day moving average. And King Warren has been a big buyer of this stock, but it hasn't helped.
If Warren wasn't a buyer of this stock, it would probably be $20. The fact is on a weekly timeframe, when you have the 50, 100, 200-day moving average declining, don't expect rallies to follow through. Just like I've been talking about AMD, it's the same thing.
We continue to see the same thing over and over again. that we see this pattern of lower highs and lower lows, and the sum of the declines is greater than the sum of the rallies. So not to talk too much about that stock in particular, but back to the financials, I don't trust them.
They've got that 200-day moving average up in there, and that potential for this prior band of support is likely to act as supply. Support broken tends to act as resistance. We look at it as a level of interest to say, okay, if we're finding supply up in there and it starts to roll over...
and it gets trapped below a declining five-day moving average, it's likely that, you know, so let's say it does this. It runs up towards 48, and it does a little bit of this. That five-day moving average comes along like this. It starts to decline, and we get trapped below it.
Well, this is where you want to sell short right here, because the trend would be lower on this shorter term time frame, which is in alignment with the downtrend on the daily time frame. So you would want a short here with a stop above there. That's the way you look at it.
The bonds, the people who bought the breakout here, again, I always talk about it. Don't buy breakouts when the market has already had an extended run. This one from 88 and a half broke out at 92 and change and then rallied to 94. The people who bought on that gap because they thought, you know, the yields were going lower because that's what the, you know, the president wants.
They got, they got hit hard. They got, you know, I hate to say it, they got what they deserve for chasing. something.
And it's never meant as a mean statement because I know that if I buy up here and I don't quickly get out and I continue to hold, I deserve that. I blame myself. I don't blame the president.
I don't blame China. I don't blame market makers or anything like that. By the way, again, I need to remind you that Sunday, the Alpha Trends sale is over.
It's a value of about $2,300 for $999. And you can see all the details at alphatrends.net. So I won't make this into a long sales pitch for you.
If you're interested, you're interested. If you're not, I'm not going to force it down your throat. Energy names bounced a little bit here today.
Support broken, tends to act as resistance. We spoke about this, if you recall, earlier in the year that this has the potential to come down towards these anchors. And that we finally broke that little trend line and it's broken.
So. They're guilty till proven innocent. Crude oil itself is also getting hit.
So let me put this on pause. And here is the daily chart of crude oil. Let's take a look at the weekly because as I've been pointing out, this is the anchor from the 2016 low. And we were seeing those lower highs and more repeated tests of support.
So trying to stabilize in here. That's a good thing that it's trying to stabilize, but we don't have evidence the buyers are in control yet. What about Bitcoin? Let's talk about that for a moment. And let me just open that up a little bit so we can see it better.
We still have a pattern here of lower highs and lower lows. No doubt this was a very nice recovery. We gained 4,000 overnight, but we still have a pattern of lower highs and lower lows.
I'm basically neutral on this. As I've been saying, I think that it's likely that we come down towards this 68,000 level. I still think that's likely. But as I also mentioned, I don't sell short Bitcoin because this kind of crap can happen. And I'm not going to sell short an asset that does that.
But I'm also not going to just blindly buy because I think it's good for the long term. We've got a lot of potential supply overhead. So to me, Bitcoin is more neutral.
The interesting one this week was Ethereum. And I pointed this out, which is this anchor right here goes all the way back. to, let's look at the weekly chart, all the way back to the inception of trading on Coinbase. So that's when it started trading on Coinbase.
And you can see it's been an important anchor previously, right in here in 2022, more in 2022. And we came down and almost touched it perfectly. Let's look at that now in the daily timeframe. I mean, it did touch it perfectly. If you think these VWAPs are a coincidence, they're not.
I didn't buy any. I'm not long here. I still see a pattern. I'm not looking for the bounce. I still see a pattern of lower highs and lower lows in Ethereum.
So I'm not interested in buying it. But if you are interested in buying what might be a pretty good low with a stop under here, maybe that's the way to go with this one. Anyways, join me Sunday night. I'll tweet it out live.
It's 8 p.m. Eastern. And have a good weekend.