Chart Advisor: Check in on Seasonality

May 12, 2025

One of my favorite ways to start the week is to check in on Seasonality.  The chart below illustrates the S&P 500’s performance over the past 25 years, specifically during the first year of the presidential cycle, for the seven most recent US presidents.  While that’s not a huge sample size, a wide range of scenarios and economic backdrops have tended to act somewhat similarly.  And so far, 2025 is following this playbook remarkably well.

Seasonality looks at the average movement of an index, stock, etc., on a given day over the last X number of periods.  For this example, I’m looking at the last 7 years of the S&P 500 Index, but only during the first year of a US presidential term.

I find that when seasonality and trend agree, good things can happen.  It’s worth a look now and then.

Chart Advisor: Consumer Discretionary Gaps Up

May 13, 2025

Headline Risk – when you can throw all your technical and fundamental factors away because the news can completely override all currently available information about the stock market. Sometimes the headlines are good (like today) and sometimes they make you re-consider everything (think the day after the tariffs were announced…OUCH).

Two things to note about that recent OUCH moment in April – trend was already not looking good. The Directional Movement Index (shown below) was already showing that sellers were in control (Red line is above Blue) and the candle bars were already Red (showing RRG Trend). However, the three days leading up to the April sell-off gave some false hope that the market could be turning around…before smacking us all upside the head.

Chart Advisor: Health Care (XLV) was Already Ugly

May 14, 2025

Tuesday turned out to be another solid day for the Tech-leaning sectors and the NASDAQ 100 index. Yesterday I showed a list of the 11 sectors of the S&P 500 and their headings on the RRG Graph, where the sectors with a “Northeast” heading were showing the most strength. As you may recall, those were: Consumer Discretionary (XLY), Technology (XLK), Industrials (XLI), Financials (XLF), and Communication (XLC).

Today, for a day that saw a positive move in the S&P 500, there were 5 sectors that closed lower – none of which were on the “Northeast” list from yesterday. Additionally, there are now two additions to the South-bound direction: Health Care (XLV) and Utilities (XLU).

Chart Advisor: A Season for Gold

May 15, 2025

Another of my daily go-to charts is the ratio between Large Cap Growth and Large Cap Value. The chart below shows the relative strength between these via the SPYG (SPDR S&P 500 Growth) and SPYV (SPDR S&P 500 Value) ETFs. This chart is from FastTrack.

Growth, in general, tends to lead the market – both up and down. So when the yellow line is rising, then the growth side led that day, week, etc. My moving averages here are a “weekly” proxy of a 5-day and 21-day EMA crossover. These moving averages are 5x those values: 105-day and 25-day moving averages, giving me weekly-like signals on my daily chart. Kinda fancy.

Chart Advisor: WWDKD

May 16, 2025

When we started this week, many sectors of the S&P 500 had already pushed into the Green (Leading) box and the two sectors that looked rough were Consumer Staples (XLP) and Healthcare (XLV). And if you’ve been following me this week, you heard that the Healthcare sector continued to have a rough time and the news didn’t do it any favors.

One of my favorite things about RRG Charts (under normal market circumstances) is how they give decent guidance as to where parts of the market are moving. And in the case of Healthcare, the news that came out just confimred what we were already seeing in the charts and RRG rotation.