Chartsmarter Insights

When the Facts Change..... I do to sir, what do you do? My belief has been a bearish slant with technology lagging in 2025 (it is now the second worst major S&P sector on a YTD basis) but the group has to be given credit for shrugging off some poor mega-cap moves. Names like AMD which is now more than 50% off its most recent 52-week highs (filled in gap from 2/5 Thursday and CLOSED well off session highs) without the courtesy of a 2:1 split (a weak stab at humor). MSFT is UNCH over the last year period, GOOGL slipped 7% after an ill-received earnings reaction and perhaps it will fill in its gap near 176 from 12/9. TSLA was more than one-third off its annual peak but recorded a bullish harami on Wednesday and Thursday followed through by 6% as a potential double bottom base takes shape. Despite all this, the Nasdaq is now just 1% off its all-time highs. Call me still skeptical with the index doubling off the start of 2023 lows, but the market could care less about my opinion. The WEEKLY chart here shows the back-to-back doji candles to end 2022 and start 2023 at the very round 10000 number to the present PRICE of 20000. Perhaps this is just a bull flag with a measured move to 23000 on the horizon. The daily chart below shows a push above the diamond pattern, and for me to give a bearish outlook does not make sense anymore even with many individual stocks blowing up on earnings. This will be the year of the stock picker.

Silver Lining: Silver was a solid actor Wednesday, up better than 1% as its precious metal rival gold was UNCH, an interesting divergence. It normally has a strong correlation with another commodity in copper, and that has been the case since the start of 2025 as seen here. An alternate view of looking at the daily chart of silver is the bull flag that began at the round 30 number and a break above 33 would carry a measured move to 36 which would obviously clear the double bottom with handle trigger of 33.32 seen below. On its WEEKLY chart, it recorded a doji candle, just the fourth one in the last 2 years, two of which were inconsequential, and the end of 2022 example saw a quick thrust lower before the metal bounced at the very round 20 number. The MONTHLY chart shows how important the round 30 number is, as it is the level where a long cup base broke out from last May (notice how the number was a hindrance in August 2020 and February 2021). That wall of former resistance has now likely turned into support and the measured move is to 43.

Heavyweight Bifurcation: The two giants inside the XLY dominate the vast majority of attention. TSLA has fallen dramatically since 12/18 when it recorded a bearish hanging man candle and is now 33% off the highs made that session, and has now fallen to "just" the 10th most valuable company on the planet and is in jeopardy of losing its trillion-dollar status. The daily chart below of AMZN has put its head down and ignored the noise. It is trading in a much tauter overall way, hallmark bullish trait, than some of its mega-cap tech heavyweights like MSFT, GOOGL, and NVDA. As shareholders look forward seasonality in March is at a perfect 4 for 4 in CLOSING higher than where it started since 2021 with an average gain of better than 4%. With TSLA in freefall, AMZN is going to have to do much of the heavy lifting in the XLY. There is only so much the other components can do, even with the MCD and HD at almost 12% of the fund. The latter is trying to start a handle on a cup base and the potential pivot would be 426.29. Notice how it is outshining rival LOW on the ratio chart, as HD is 5% off its most recent 52-week highs while LOW is double that off 10% from its own annual peak.

Software Loafer: Software overall has taken the baton from the semis as seen here on the ratio chart comparing the IGV to the SMH. Notice how it retested the break above a cup base from early November during the start of 2025, and like most leading instruments do it has now formed an add-on buy point above a bull flag pattern. Below is the daily chart of the second largest holding in the IGV in MSFT and one can see its struggles. It is now 12% off its most recent 52-week highs and has now formed a bear flag formation after its second straight 6% earnings-related decline on 1/30 (after its Halloween debacle). Its WEEKLY chart shows the frailty is nothing new as it has been underperforming its software peers since last summer. I believe it needs to shake the trees for some soft shareholders and a possible double-bottom base may start which would retest a former bull flag breakout from the first week of 2024. Notice it is potentially going to record its third consecutive WEEKLY CLOSE below its 50 WEEK SMA for the first time in almost 2 years. Contrasting it too perhaps the most important semi-play NVDA one can see how both are trading wide and loose in an erratic fashion, hallmark bearish traits.

Doctors Appointment: Copper has been having itself a week. The daily chart shows a surge of 3% as it broke above a bullish inverse head and shoulders trigger of 4.45 (notice the double bottom at the round 4 number on 11/14 with a hammer and a bullish morning star completed on 1/3) which carries a measured move to 4.90. FCX is a name many are focused on and this rose every day last week recording a bullish WEEKLY engulfing candle adding 6.7%. The last time it registered one the week ending 11/17/23 jumping 6.8% set off a nice overall run higher (notice the doji candle just 2 weeks before). The 34 level has been an area of a lot of PRICE support memory. This name still trades more than 30% off its most recent 52-week highs while peer SCCO is 25% off its annual peak it made last May. Friday it was rejected at the very round par number putting up a bearish shooting star similar to the candle from 1/17 which saw the stock decline by a rapid 12% just 2 weeks later. Notice the strength it has shown against FCX over the last 2 months, and I would expect this relationship to continue on a relative basis, although both can appreciate on an absolute one.