Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst
Last week, the S&P 500 and the NASDAQ recorded weekly gains, bouncing back from negative results over the previous two weeks.
The S&P 500 finished just four points shy of a record high set three weeks earlier, while the NASDAQ and the Dow were around a percentage point below their all-time peaks. The NASDAQ led domestic indices with a gain of 2.6%, while the S&P 500 advanced 1.5%.
As measured by Russell indexes, small-cap stocks lagged, with the Russell 2000 Index trailing the S&P 500 Index by 146 basis points (1.46 percentage points) for the week. Year-to-date, the Russell 2000 is ahead just 2.23%, trailing the S&P 500 (+4%) and the NASDAQ (+3.7%).
Even though the indices experienced modest weekly gains, there wasn’t a corresponding expansion in market breadth. On a week-over-week basis, the S&P 500’s breadth ticked up slightly to 60.80% from 60.00%—not exactly encouraging. Typically, broader participation suggests healthy investor sentiment and supportive technicals. Various data points help convey market breadth, including advancing vs. declining issues, the percentage of stocks within an index that are above or below a longer-term moving average, and new highs vs. new lows.
Russell 2000 Struggles to Break Resistance
The Russell 2000 index (RUT), which closed at 226, remains in a sideways trend and is still struggling to push above resistance at the 50-day Simple Moving Average (SMA), which finished the week at 227.13. Additionally, the 50-day SMA, a measure of the intermediate-term trend, has been rolling over—another bearish signal. We’ll be watching this index closely next week.
European Markets Outperform & Leadership Rotation Underway
European equity markets are outperforming so far in 2025. The German DAX is up 13% year-to-date, and the broader Stoxx 600, a proxy for European large-cap stocks, is up 10%, both outpacing the S&P 500.
A leadership rotation also appears to be underway, challenging tech’s dominant position. Earnings growth for the S&P 493 (S&P 500 minus the Magnificent 7) is accelerating after a two-year lull. The Magnificent 7 (Apple, Microsoft, Amazon, Alphabet, Meta, NVIDIA, and Tesla), which comprise about a third of the S&P 500’s weight, have lost some of their luster in 2025. Even though the group contributed more than half of the S&P 500’s gains over the past two years, performance is lagging this year. Sales growth in Q4 2024 was at its slowest since 2022, and increasing AI competition, coupled with rising spending, is raising valuation concerns. The group currently trades at a 35% premium to the broader index.
Strong Earnings and Precious Metals Surge
For Q4, financials, health care, and real estate joined the traditional growth sectors (tech, communication services, and consumer discretionary) in delivering double-digit profit growth. The broader S&P 500 is on track for its highest quarterly earnings increase in three years, with profits growing 17% year-over-year, exceeding earlier expectations of 12% growth.
Gold climbed to a record high in volatile trading on Friday, reaching as high as $2,964 before pulling back in the afternoon. Silver also saw a strong rally before stalling, briefly touching $34 per ounce, its highest level in over a decade.
As always, we’ll be “Trading What We See Technically, Not What We Think.”
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