Breaking
Financial Vision Daily
Author

admin

Browsing
In Business

Amazon to pay $2.5 billion to settle FTC allegations that it duped customers into enrolling in Prime

3 Mins Read

SEATTLE — Amazon has reached a historic $2.5 billion settlement with the Federal Trade Commission, which said the online retail giant tricked customers into signing up for its Prime memberships and made it difficult for them to cancel after doing so.

The Seattle company will pay $1 billion in civil penalties — the largest fine in FTC history, and $1.5 billion will be paid to consumers who were unintentionally enrolled in Prime, or were deterred from canceling their subscriptions, the agency said Thursday. Eligible Prime customers include those who may have signed up for a membership via the company’s “Single Page Checkout” between June 23, 2019 to June 23, 2025.

The Federal Trade Commission sued Amazon in U.S. District Court in Seattle two years ago alleging more than a decade of legal violations. That included a violation of the Restore Online Shoppers’ Confidence Act, a 2010 law designed to ensure that people know what they’re being charged for online.

Amazon admitted no wrong-doing in the settlement. It did not immediately respond to requests by The Associated Press for comment Thursday.

Amazon Prime provides subscribers with perks that include faster shipping, video streaming and discounts at Whole Foods for a fee of $139 annually, or $14.99 a month.

It’s a key and growing part of Amazon’s business, with more than 200 million members. In its latest financial report, the company reported in July that it booked more than $12 billion in net revenue for subscription services, a 12% increase from the same period last year. That figure includes annual and monthly fees associated with Prime memberships, as well as other subscription services such as its music and e-books platforms.

The company has said that it clearly explains Prime’s terms before charging customers, and that it offers simple ways to cancel membership, including by phone, online and by online chat.

“Occasional customer frustrations and mistakes are inevitable — especially for a program as popular as Amazon Prime,” Amazon said in a trial brief filed last month.

But the FTC said Amazon deliberately made it difficult for customers to purchase an item without also subscribing to Prime. In some cases, consumers were presented with a button to complete their transactions — which did not clearly state it would also enroll them in Prime, the agency said.

Getting out of a subscription was often too complicated, and Amazon leadership slowed or rejected changes that would have made canceling easier, according to an FTC complaint.

Internally, Amazon called the process “Iliad,” a reference to the ancient Greek poem about the lengthy siege of Troy during the Trojan war. The process requires the customer to affirm on three pages their desire to cancel membership.

The FTC began looking into Amazon’s Prime subscription practices in 2021 during the first Trump administration, but the lawsuit was filed in 2023 under former FTC Chair Lina Khan, an antitrust expert who had been appointed by Biden.

The agency filed the case months before it submitted an antitrust lawsuit against the retail and technology company, accusing it of having monopolistic control over online markets.

This post appeared first on NBC NEWS

Keep Reading
In Business

Former Fed chairs warn that removing Lisa Cook could lead to inflation boom

4 Mins Read

A group of the country’s top economic leaders, including every living former Federal Reserve chair, filed an amicus brief with the Supreme Court on Thursday in support of Fed governor Lisa Cook, who President Donald Trump is seeking to remove.

The group, led former central bank chiefs Alan Greenspan, Ben Bernanke and Janet Yellen, said that “allowing the removal of Governor Lisa D. Cook while the challenge to her removal is pending would threaten that independence and erode public confidence in the Fed.”

The bipartisan group, which also includes former Treasury Secretaries Robert Rubin, Larry Summers, Hank Paulson, Jack Lew and Timothy Geithner, added that “the independence of the Federal Reserve, within the limited authority granted by Congress to achieve the goals Congress itself has set, is a critical feature of our national monetary system.”

As the U.S. central bank, the Federal Reserve is part of the U.S. government and its leaders are put in place by elected officials, but it also retains a considerable amount of independence that is meant to allow it to make decisions purely out of economic concerns rather than political ones.

The former economic officials said that an erosion of Fed independence could result “in substantial long-term harm and inferior economic performance overall.”

The Supreme Court is considering whether Trump has the authority to fire Cook, who has been a target for the White House for weeks as part of a broader pressure campaign to push the Fed to more aggressively cut interest rates.

Cook’s attempted removal stems from allegations of mortgage fraud, made in August by top Trump ally and Federal Housing Finance Authority Director Bill Pulte.

Cook has repeatedly denied the allegations and has not been charged with any crime. Documents reviewed by NBC News in mid-September appeared to contradict Pulte’s allegations.

Two courts have so far blocked Cook’s removal, leading Trump to ask the Supreme Court a week ago to allow him to fire her. In a court filing, Solicitor General D. John Sauer said a judge’s ruling that blocked the firing constituted “improper judicial interference.”

In a filing to the Supreme Court on Thursday, Cook’s lawyers said that ‘she committed neither ‘fraud’ nor ‘gross negligence’ in relation to her mortgages.’

Cook asked the court to deny Trump’s attempt to remove her while the case is argued.

The White House has repeatedly maintained that Trump “lawfully removed Lisa Cook for cause.”

The brief filed Thursday is a who’s who of the country’s top economic minds. Former Fed governor Dan Tarullo is also listed as a signatory to the brief, as well as the economists Ken Rogoff, Phil Gramm and John Cochrane.

Glenn Hubbard, Greg Mankiw, Christina Romer, Cecilia Rouse, Jared Bernstein and Jason Furman, a group who served as top officials on the White House’s council of economic advisers during Republican and Democrat administrations, also signed the brief.

None of the officials who signed the filing have served in either of Trump’s administrations.

Lisa Cook is sworn in during a Senate Banking hearing in 2023.Drew Angerer / Getty Images file

Trump is the first president in U.S. history to try to remove a sitting Fed official.

‘There is broad consensus among economists, based on decades of macroeconomic research, that a more independent central bank will lead to lower and more stable inflation without creating higher unemployment — thus helping to achieve the Federal Reserve’s statutory objective of price stability and maximum employment,’ the officials said in the brief.

‘The Federal Reserve walks a careful line in pursuit of its goals.’

They noted that ‘elected officials often favor lowering interest rates to boost employment, particularly leading up to an election.’

‘Although that approach may satisfy voters temporarily, it does not lead to lasting gains for unemployment or growth and can instead lead to persistently higher inflation in the long-term and thus ultimately harm the national economy.’

The former Fed chairs and economic officials, in their filing, highlight a notorious case of political pressure on the Fed:

‘In the early 1970s, President Richard Nixon famously exerted political pressure over then-Chair of the Fed Arthur Burns to lower unemployment by reducing interest rates. During this period ‘the Fed made only limited efforts to maintain policy independence and, for doctrinal as well as political reasons, enabled a decade of high and volatile inflation.’ This contributed to an ‘inflationary boom’ and deep recession that took years to bring back under control.’

This post appeared first on NBC NEWS

Keep Reading
In Stocks

The Real Drivers of This Market: AI, Semis & Robotics

1 Min Read

In this video, Mary Ellen spotlights the areas driving market momentum following Taiwan Semiconductor’s record-breaking earnings report. She analyzes continued strength in semiconductors, utilities, industrials, and AI-driven sectors, plus highlights new leadership in robotics and innovation-focused ETFs like ARK. From there, Mary Ellen breaks down weakness in health care and housing stocks, shows how to refine trade entries using hourly charts, and compares today’s rally to past market surges. Watch as she explores setups in silver and examines individual stocks like Nvidia, BlackRock, and State Street.

This video originally premiered on July 18, 2025. You can watch it on our dedicated page for Mary Ellen’s videos.

New videos from Mary Ellen premiere weekly on Fridays. You can view all previously recorded episodes at this link.

If you’re looking for stocks to invest in, be sure to check out the MEM Edge Report! This report gives you detailed information on the top sectors, industries and stocks so you can make informed investment decisions.

Keep Reading
In Stocks

S&P 500 Breaking Out Again: What This Means for Your Portfolio

3 Mins Read

The S&P 500 ($SPX) just logged its fifth straight trading box breakout, which means that, of the five trading ranges the index has experienced since the April lows, all have been resolved to the upside.

How much longer can this last? That’s been the biggest question since the massive April 9 rally. Instead of assuming the market is due to roll over, it’s been more productive to track price action and watch for potential changes along the way. So far, drawdowns have been minimal, and breakouts keep occurring. Nothing in the price action hints at a lasting change — yet.

While some are calling this rally “historic,” we have a recent precedent. Recall that from late 2023 through early 2024, the index had a strong start and gave way to a consistent, steady trend.

From late October 2023 through March 2024, the S&P 500 logged seven consecutive trading box breakouts. That streak finally paused with a pullback from late March to early April, which, as we now know, was only a temporary hiccup. Once the bid returned, the S&P 500 went right back to carving new boxes and climbing higher.

New 52-Week Highs Finally Picking Up

If there’s been one gripe about this rally, it’s that the number of new highs within the index has lagged. As we’ve discussed before, among all the internal breadth indicators available, new highs almost always lag — that’s normal. What we really want to see is whether the number of new highs begins to exceed prior peaks as the market continues to rise, which it has, as shown by the blue line in the chart below.

As of Wednesday’s close, 100 S&P 500 stocks were either at new 52-week highs or within 3% of them. That’s a strong base. We expect this number to continue rising as the market climbs, especially if positive earnings reactions persist across sectors.

Even when we get that first day with 100+ S&P 500 stocks making new 52-week highs, though, it might not be the best time to initiate new longs.

The above chart shows that much needs to align for that many stocks to peak in unison, which has historically led to at least a short-term consolidation, if not deeper pullbacks — as highlighted in yellow. Every time is different, of course, but this is something to keep an eye on in the coming weeks.

Trend Check: GoNoGo Still “Go”

The GoNoGo Trend remains in bullish mode, with the recent countertrend signals having yet to trigger a greater pullback.

Active Bullish Patterns

We still have two live bullish upside targets of 6,555 and 6,745, which could be with us for a while going forward. For the S&P 500 to get there, it will need to form new, smaller versions of the trading boxes.

Failed Bearish Patterns

In the chart below, you can view a rising wedge pattern on the recent price action, the third since April. The prior two wedges broke down briefly and did not lead to a major downturn. The largest pullbacks in each case occurred after the S&P 500 dipped below the lower trendline of the pattern.

The deepest drawdown so far is 3.5%, which is not exactly a game-changer. Without downside follow-through, a classic bearish pattern simply can’t be formed, let alone be broken down from.

We’ll continue to monitor these formations as they develop because, at some point, that will change.

Keep Reading
In Business

Ben & Jerry’s co-founder resigns, claiming parent company Unilever ‘silenced’ its campaigning

3 Mins Read

Jerry Greenfield, co-founder of the Ben & Jerry’s ice cream brand, has stepped down from the company he started 47 years ago citing a retreat from its campaigning spirit under parent company Unilever.

Greenfield wrote in an open letter late Tuesday night — shared on X by his co-founder Ben Cohen — that he could no longer ‘in good conscience’ remain an employee of the company and said the company had been ‘silenced.’

He said the company’s values and campaigning work on ‘peace, justice, and human rights’ allowed it to be ‘more than just an ice cream company’ and said the independence to pursue this was guaranteed when Anglo-Dutch packaged food giant Unilever bought the brand in 2000 for $326 million.

Cohen’s statement didn’t mention Israel’s ongoing military operation in Gaza, but Ben & Jerry’s has been outspoken on the treatment of Palestinians for years and in 2021 withdrew sales from Israeli settlements in what it called ‘Occupied Palestinian Territory.’

Greenfield’s resignation comes five months after Ben & Jerry’s filed a lawsuit accusing Unilever of firing its chief executive, David Stever, over his support for the brand’s political activism. In November last year Ben & Jerry’s filed another lawsuit accusing Unilever of silencing its public statements in support of Palestinian refugees.

‘It’s profoundly disappointing to come to the conclusion that that independence, the very basis of our sale to Unilever, is gone,’ Greenfield said.

‘And it’s happening at a time when our country’s current administration is attacking civil rights, voting rights, the rights of immigrants, women, and the LGBTQ community,’ he added.

Jerry Greenfield, left, and Bennett Cohen, the founders of Ben and Jerry’s founders, in Burlington, Vt., in 1987.Toby Talbot / AP file

Richard Goldstein, the then president of Unilever Foods North America, said in a statement after the sale in 2000 that Unilever was ‘in an ideal position to bring the Ben & Jerry’s brand, values and socially responsible message to consumers worldwide.’

But now Greenfield claims Ben & Jerry’s ‘has been silenced, sidelined for fear of upsetting those in power.’ He said he would carry on campaigning on social justice issues outside the company.

The financial performance of the Ben & Jerry’s brand isn’t made public but Unilever’s ice cream division made 8.3 billion Euros ($9.8 billion) in revenue in 2024. Unilever is in the process of spinning off its ice cream division, however, into a separate entity which involves cutting some 7,500 jobs across its brands globally.

Cohen and Greenfield founded the business in 1978 in Burlington, Vermont, where it is still based.

NBC News has contacted Unilever for comment overnight but had not received any at the time of publication.

This post appeared first on NBC NEWS

Keep Reading
In Stocks

July Strength, Late-Summer Caution: 3 Charts to Watch

4 Mins Read

Even with a few short-lived roller coaster rides, the stock market had a strong week. Though there was some selling on Friday, the S&P 500 ($SPX) and Nasdaq Composite ($COMPQ) closed up over the week as a whole, while the Dow Jones Industrial Average ($INDU) closed lower by 0.07%.

Earnings season has started on a positive note, with big banks and Netflix, Inc. (NFLX) reporting better-than-expected earnings. Inflation remains relatively tame and the labor market remains resilient. This has helped fuel the stock market’s higher trajectory, with sectors such as Technology, Industrials, and Financials showing strong upward moves.  Even small-caps are hanging in there, although they have pulled back a bit.

This price action supports broad participation in the market. The S&P 500 Equal-Weighted Index ($SPXEW) is also holding strong, trading above its 20-day exponential moving average. This tells us that participation isn’t limited to a handful of giants.

A Look Under the Hood

Overall growth still takes center stage and, so far, July is following its seasonality pattern. The seasonality chart below shows that in the last 10 years, the return in July was positive every year, with an average gain of 3.30%.

FIGURE 1. SEASONALITY CHART OF THE S&P 500. July is a strong month for the index, but August, September, and October paint a different picture.Image source: StockCharts.com. For educational purposes.

Switching to a same-scale line chart (with a few years removed for clarity) you can see that even in 2020 and 2022, when the S&P 500 was in negative territory, July was still a strong month.

FIGURE 2. SAME-SCALE SEASONALITY CHART FOR S&P 500 FROM 2016 TO 2025. July is a strong month for stocks, although some years the latter part of the month has seen a decline.Image source: StockCharts.com. For educational purposes.

Seasonality shifts notably as we move into late summer and early fall. That doesn’t guarantee a weak August, but it does argue for staying alert. It’s like driving into a stretch of winding road. You don’t slam the brakes, you just keep both hands on the wheel.

How to Track the Overall Market’s Performance

For a bird’s-eye view, the StockCharts Market Summary is your go-to page, but, after drilling down, one chart I often visit in my Market Analysis ChartList is the 3-year weekly chart of the S&P 500, with its Bullish Percent Index (BPI) and the percentage of S&P 500 stocks trading above their 200-day moving average.

FIGURE 3. WEEKLY CHART OF S&P  500 WITH MARKET BREADTH INDICATORS. From a weekly perspective, the S&P 500 is still trending higher. Breadth indicators support the bullish move.Chart source: StockCharts.com. For educational purposes.

The trend is still higher, although the range between the open and close is relatively narrow. The BPI is above 50 but is flattening out, and the percentage of stocks trading above their 200-day moving average is also declining. Neither breadth indicator suggests we’ll see a massive selloff in the coming days.

The Cboe Volatility Index ($VIX) is low, and investor sentiment leans bullish (you can confirm this in the Sentiment panel of the Market Summary page).

Will Growth Lead For the Rest of the Year?

There are lots of variables that can change from now to the end of the year, from government policy to geopolitical tensions. These changes will be reflected in the market breadth and sentiment charts.

Tip: StockCharts members can download the Market Summary ChartPack to include the charts from the page in their ChartLists. You need to keep an eye on these charts for leading signals of change in the market’s price action.

End-of-Week Wrap-Up

Stock Market Weekly Performance

  • Dow Jones Industrial Average: 44,342.19 (-0.07%)
  • S&P 500: 6,296.79 (+0.59%)
  • Nasdaq Composite: 20,895 (+1.51%)
  • $VIX: 16.41 (+0.06%)
  • Best performing sector for the week: Technology
  • Worst performing sector for the week: Energy
  • Top 5 Large Cap SCTR stocks:  AST Spacemobile, Inc.(ASTS); Nuscale Power Corp. (SMR); Robinhood Markets Inc. (HOOD); Avis Budget Group (CAR); Symbiotic, Inc. (SYM)

On the Radar Next Week

  • June Home Sales
  • June Durable Goods Orders
  • Several Fed speeches
  • Earnings from Alphabet, Inc. (GOOGL), Tesla, Inc. (TSLA), AT&T Inc. (T), Intel Corp. (INTC), International Business Machines (IBM), and many more.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Keep Reading
In Stocks

The Real Drivers of This Market: AI, Semis & Robotics

1 Min Read

In this video, Mary Ellen spotlights the areas driving market momentum following Taiwan Semiconductor’s record-breaking earnings report. She analyzes continued strength in semiconductors, utilities, industrials, and AI-driven sectors, plus highlights new leadership in robotics and innovation-focused ETFs like ARK. From there, Mary Ellen breaks down weakness in health care and housing stocks, shows how to refine trade entries using hourly charts, and compares today’s rally to past market surges. Watch as she explores setups in silver and examines individual stocks like Nvidia, BlackRock, and State Street.

This video originally premiered on July 18, 2025. You can watch it on our dedicated page for Mary Ellen’s videos.

New videos from Mary Ellen premiere weekly on Fridays. You can view all previously recorded episodes at this link.

If you’re looking for stocks to invest in, be sure to check out the MEM Edge Report! This report gives you detailed information on the top sectors, industries and stocks so you can make informed investment decisions.

Keep Reading
In Stocks

Week Ahead: NIFTY Violates Short-Term Supports; Stays Tentative Devoid Of Any Major Triggers

4 Mins Read

The Nifty traded in a broadly sideways and range-bound manner throughout the previous week and ended the week with a modest decline. The Index oscillated within a narrow 276-point range, between 25144.60 on the higher end and 24918.65 on the lower end, before settling mildly lower. The India VIX declined by 3.60% over the week to 11.39, suggesting continued complacency in the markets. On a weekly basis, Nifty ended with a net loss of 181.45 points or (-0.72%).

The Nifty is presently consolidating just below a key resistance zone after attempting a breakout above a rising channel. This zone, between 25100 and 25350, has proven to be a supply area where profit-taking has emerged. While the broader trend remains intact and the Nifty is above key moving averages, it is still within a complex zone of consolidation. This pause in momentum comes after a sharp up move from the lows near 21743 in April. A strong breakout above the 25265 –25350 zone, with a closing confirmation, may resume the uptrend. Conversely, a sustained move below 24750 could trigger incremental weakness and drag the Nifty towards lower supports.

 As we head into the new week, the markets may see a cautious start amid the current range-bound setup. The immediate resistance is at 25150, followed by 25400. On the lower side, the key support zones are placed at 24750 and further near 24380.

The weekly RSI stands at 56.54 and remains neutral without showing any divergence against price. It has made a fresh 14-period low, which is bearish. The MACD remains above its signal line on the weekly chart, continuing to indicate a positive crossover. No significant candlestick formation was observed for the week.

From a pattern analysis perspective, Nifty is trading just below the upper bound of a rising channel that it had briefly broken out of. With the Index slipping below the support levels of 25000-25150, it faces resistance at this zone again, failing to follow through on the breakout. Price action is still above the 20-week and 50-week moving averages, maintaining a bullish undertone from a medium-term perspective. However, the ongoing sideways action indicates a lack of fresh directional conviction.

Given the current technical structure, it would be prudent for traders to remain selective and protect profits at higher levels. The markets are not displaying signs of aggressive strength, and unless there is a convincing move above 25350, a stock-specific approach with tight risk management is advised. Traders may avoid aggressive fresh buying until a directional move is clearly established. Cautious optimism, with a focus on stocks exhibiting stronger relative strength, is the ideal approach for the coming week.

Sector Analysis for the coming week

In our look at Relative Rotation Graphs®, we compared various sectors against the CNX500 (NIFTY 500 Index), representing over 95% of the free-float market cap of all the listed stocks. 

Relative Rotation Graphs (RRG) show that the Nifty Media and the Metal Index have rolled inside the leading quadrant. The Midcap 100, Realty, and PSU Bank Index are also inside the leading quadrant. These groups are likely to relatively outperform the broader Nifty 500 Index.

The Nifty Bank, PSE, and the Financial Services Index are inside the weakening quadrant. They may experience a decline in relative performance compared to the broader markets.

The Nifty Services Sector Index, Pharma, Consumption, and the FMCG Index continue to languish inside the lagging quadrant. Among these groups, the Pharma Index shows improvement in its relative momentum against the broader markets.

The IT Index is inside the improving quadrant; it continues to improve its relative momentum against the benchmark. The Auto Index, which is also inside the improving quadrant, is seen deteriorating in relative momentum.

Important Note: RRG charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.  

Milan Vaishnav, CMT, MSTA

Consulting Technical Analyst

www.EquityResearch.asia | www.ChartWizard.ae

Keep Reading
In Stocks

The Best Five Sectors, #28

5 Mins Read

Sector Rotation Stalls, Tech Remains King

Despite a slight rise in the S&P 500 over the past week, the sector rotation landscape is presenting an intriguing picture. For the first time in recent memory, we’re seeing absolutely no changes in the composition of the sector ranking — not just in the top five, but across the board. Will this stability kick off a return to a period of more significant trends in relative strength and a return to outperformance for the portfolio?

  1. (1) Technology – (XLK)
  2. (2) Industrials – (XLI)
  3. (3) Communication Services – (XLC)
  4. (4) Financials – (XLF)
  5. (5) Materials – (XLB)
  6. (6) Utilities – (XLU)
  7. (7) Consumer Discretionary – (XLY)
  8. (8) Consumer Staples – (XLP)
  9. (9) Real-Estate – (XLRE)
  10. (10) Energy – (XLE)
  11. (11) Healthcare – (XLV)

Technology

The tech sector continues to flex its muscles, moving up on the price ratio scale while maintaining a stable momentum around 103. This sustained strength is a clear indication that tech remains the sector to beat in the current market environment.

On the daily RRG, we’re seeing a nice rotation backup for tech while inside the weakening quadrant, a sign of strength that confirms the move on the weekly RRG. The raw RS line for tech is climbing almost straight up, reflecting very strong RRG lines. There might be a slight loss of momentum, but make no mistake, tech is still the strongest player in the game.

Industrials

Industrials is currently rotating out of the leading quadrant and sits on the verge of moving into weakening. However, it’s crucial to note that it still holds the second-highest rank based on the RS ratio. This positioning suggests that the odds for a rotation back up towards the leading quadrant are still in play.

The daily RRG shows industrials confirming its strength with a move further into the leading quadrant, moving up on the RS ratio scale while keeping stable momentum.

After breaking out of overhead resistance, the price chart continues higher, and a new higher low is visible on the relative strength line. This keeps the RS ratio line at elevated levels, though the RS momentum line is still moving lower just above 100. If this RS line can maintain a series of higher highs or higher lows, I expect the RS momentum line to bottom out soon and follow the RS ratio higher.

Communication Services

The communication services sector is positioned inside the weakening quadrant on the weekly RRG but has hooked back to the left and is now even lower on the RS ratio scale. It’s moving towards the lagging corner, which is a concerning trend for its top 5 position.

On the daily RRG, communication services have moved into the lagging quadrant. It has started to slow down on the negative momentum, but we need a rotation back up on this daily RRG into the improving quadrant and back to leading to have that weekly tail curl back up to its leading quadrant as well.

The price chart shows the sector holding up after breaking higher, with a pullback now finding support at the level of old resistance, respecting the rule that old resistance is expected to work as support going forward. The problem child here is the raw RS line, which has fallen below its rising support line. This is taking its toll on the RRG lines, with both RS ratio and RS momentum rolling over and starting to move down.

Financials

Financials are inside the lagging quadrant on the weekly RRG, moving at a negative heading. This means that a significant amount of strength is needed from the daily tail to keep this sector within the top five.

On the price chart, financials are playing around with overhead resistance around 52, with a small consolidation area and a pennant-like formation suggesting more upside potential on the price chart.

However, this is not confirmed on the relative strength chart, where the RS line has broken its rising trend and is moving lower.

Materials

Materials are also inside the lagging quadrant on the weekly RRG and traveling a negative heading, like financials. Here, also, strength is needed from the daily teams to keep the sector inside the top five.

Materials are holding up on the price chart after a break that could be described as a head-and-shoulders reversal pattern. The relative strength line remains contained within the boundaries of its falling channel, but hugging the falling resistance line.

We need a break higher to turn that trend around. Only an upward breakout of that relative downtrend will turn the RRG lines around and provide a lifeline for materials to maintain its position inside the top five.

Portfolio Performance

The portfolio continues to lag the S&P 500, currently sitting around 8% behind. It seems to be stabilizing for now, but it’s not exactly what we want, of course. A drawdown of around 8-10% is not unprecedented, based on historical backtests; however, it’s somewhat disappointing that it occurs right when we begin operating in a semi-live environment.

That said, the fact that we’re now stable with no changes after a period of significant volatility over recent months could be a sign that we’re ready to enter a new period with stable relative trends that can bring the portfolio back to outperformance.

#StayAlert and have a great week. –Julius

Keep Reading
In Stocks

S&P 500 Breaking Out Again: What This Means for Your Portfolio

3 Mins Read

The S&P 500 ($SPX) just logged its fifth straight trading box breakout, which means that, of the five trading ranges the index has experienced since the April lows, all have been resolved to the upside.

How much longer can this last? That’s been the biggest question since the massive April 9 rally. Instead of assuming the market is due to roll over, it’s been more productive to track price action and watch for potential changes along the way. So far, drawdowns have been minimal, and breakouts keep occurring. Nothing in the price action hints at a lasting change — yet.

While some are calling this rally “historic,” we have a recent precedent. Recall that from late 2023 through early 2024, the index had a strong start and gave way to a consistent, steady trend.

From late October 2023 through March 2024, the S&P 500 logged seven consecutive trading box breakouts. That streak finally paused with a pullback from late March to early April, which, as we now know, was only a temporary hiccup. Once the bid returned, the S&P 500 went right back to carving new boxes and climbing higher.

New 52-Week Highs Finally Picking Up

If there’s been one gripe about this rally, it’s that the number of new highs within the index has lagged. As we’ve discussed before, among all the internal breadth indicators available, new highs almost always lag — that’s normal. What we really want to see is whether the number of new highs begins to exceed prior peaks as the market continues to rise, which it has, as shown by the blue line in the chart below.

As of Wednesday’s close, 100 S&P 500 stocks were either at new 52-week highs or within 3% of them. That’s a strong base. We expect this number to continue rising as the market climbs, especially if positive earnings reactions persist across sectors.

Even when we get that first day with 100+ S&P 500 stocks making new 52-week highs, though, it might not be the best time to initiate new longs.

The above chart shows that much needs to align for that many stocks to peak in unison, which has historically led to at least a short-term consolidation, if not deeper pullbacks — as highlighted in yellow. Every time is different, of course, but this is something to keep an eye on in the coming weeks.

Trend Check: GoNoGo Still “Go”

The GoNoGo Trend remains in bullish mode, with the recent countertrend signals having yet to trigger a greater pullback.

Active Bullish Patterns

We still have two live bullish upside targets of 6,555 and 6,745, which could be with us for a while going forward. For the S&P 500 to get there, it will need to form new, smaller versions of the trading boxes.

Failed Bearish Patterns

In the chart below, you can view a rising wedge pattern on the recent price action, the third since April. The prior two wedges broke down briefly and did not lead to a major downturn. The largest pullbacks in each case occurred after the S&P 500 dipped below the lower trendline of the pattern.

The deepest drawdown so far is 3.5%, which is not exactly a game-changer. Without downside follow-through, a classic bearish pattern simply can’t be formed, let alone be broken down from.

We’ll continue to monitor these formations as they develop because, at some point, that will change.

Keep Reading