The Weekly Trend
The Weekly Trend
Episode 251: Rubber Meets The Road
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In this week's episode, David and Ian discuss the how strong the end of April and beginning of May has been for the market, breadth thrusts, and specific areas of the market holding up well, like Bitcoin, Global Infrastructure, and Growth areas.
Welcome back to the Weekly Trend Podcast. Today is Friday, May 2nd, 2025 s and P 500, currently sitting at 56 79. I'm David Zing here with Ian McMillan. We continue to see some follow through after being. Inside April, ninth, price action. We've left that behind. Where are we at now, Ian?
ian_1_05-02-2025_115803Yeah, that was quite the month from April. Quite the monthly candlestick.
david_1_05-02-2025_105804Yeah.
ian_1_05-02-2025_115803And not, I mean, obviously if you get that on the major indices. Right, we did. You're gonna see that, you know, on most individual charts and sector and sub-industry type ETFs. And we did get that so fascinating, all of that noise. And we basically ended up where we started.
david_1_05-02-2025_105804I mean, April as a month was technically negative for the s and p 500, but only by like maybe a percent, like 0.75% if it had closed. If it had closed green, it would've been the largest. Reversal type candle on a monthly basis ever. We didn't get that, but doggone near close,
ian_1_05-02-2025_115803Close. close. And
david_1_05-02-2025_105804and we
ian_1_05-02-2025_115803does that mean we have another V bottom
david_1_05-02-2025_105804could be, I mean,
ian_1_05-02-2025_115803trillion dollar question?
david_1_05-02-2025_105804yep, it is a trillion dollar question. Multi-trillion dollar question. We recorded on Thursday last week. We talked about those weak breath thrust and how we were on the verge of recording that we did get one which does have very strong six to 12 month return characteristics, not a guarantee. We did not record a whaley breath thrust or breakaway momentum like we did in October and November of 2023. Could still happen. But to your point, lots of long tailed monthly candles out there from April.
ian_1_05-02-2025_115803All good. They look good.
david_1_05-02-2025_105804Mm-hmm. And it took exactly one month, you know, quote unquote, liberation Day was April 2nd. Today is May 2nd, and about a, almost a 15% round trip since those tariff announcements.
ian_1_05-02-2025_115803How
david_1_05-02-2025_105804So you, yeah. Markets.
ian_1_05-02-2025_115803right there. We are right there at the. So, yeah, Wednesday, April 7th, it was after the close I believe that all the tariff hoopla was announced and started. And so we had the big gap down, the next day. And wouldn't, you know, we are actually technically above the close from that day right now.
david_1_05-02-2025_105804Yep.
ian_1_05-02-2025_115803Which also means depending on if you wanna use ETF cash futures right there for the July 20, 24 highs.
david_1_05-02-2025_105804Right.
ian_1_05-02-2025_115803big, big, big area, 56 50 evidence kind of continues to build that. The lows are in.
david_1_05-02-2025_105804Yeah, could be. I mean, this is a pretty big area that we're in right now. You mentioned the, the July 20, 24 highs price interacted here in August of 24, in October of 24. Twice.
ian_1_05-02-2025_115803Yep.
david_1_05-02-2025_105804we interacted in there, in, in this level in March. So lots of this is, this is where as a technician, right, we're studying supply and demand dynamics. Buyers and sellers have been interacting in this 5,600 to 5,800 level four just under a year. I mean, this is a, an important spot.
ian_1_05-02-2025_115803months. Yeah.
david_1_05-02-2025_105804You know, this is an important spot where we've seen. Equilibrium take place or selling show up or buying show up. It's gonna be really interesting to see if we just slice right through here or if there's any pause along the way if this is a v bottom. But we do have a, a weak breath thrust in our hands. The most positive six month period is November to April of any 12 month period when we look at it. So we also have that negative. Which we've covered in the past, that that's something to pay attention to that if you have that period being negative, just want to sit forward, pay attention. I mean, it was down about 1.75% over that timeframe
ian_1_05-02-2025_115803Agreed.
david_1_05-02-2025_105804for that, for the s and p 500. Yet we've got this wig breath thrust in our back pocket and, and quite a move down and up in April. And it really is. Pretty impressive and the fact that we're still below a 200 day moving average, I think that just shows how deep the damage was previously, like when we go through the other major indices or maybe some ETFs for large caps per still percentage points below a 200 day moving average, which means that the move in April was pretty significant
ian_1_05-02-2025_115803was significant fast. Obviously not to the same extent as something like Covid.
david_1_05-02-2025_105804Right up there. Right up there with it.
ian_1_05-02-2025_115803recovery so far. Definitely kind of 2018, early 2019 vibes. We'll see that had a little bit more not the exact same on the way down, but recovery wise that we can see.
david_1_05-02-2025_105804Yeah, I mean the fact that, for example, small caps using IWM are is still 8% below, its 200 day and 20% away from all time highs or mid caps are still 5% away from a 200 day I. This is after this rally and 16% away from all time highs. You have the Dow Jones about a little less than 3% away from a 200 day and 9% away from all time highs. The Qs, s and p you know, fangs all look better. They're almost right at their 200 day. And there's momentum. Yeah, momentum still looks good. I mean, you have international stocks using BEU is above a 200 day. Emerging markets are above a 200 day. But for context, emerging markets is still 28% away from prior all time highs. Mags still 20% away from all time highs. Meanwhile, FANG stocks are, quote unquote only 9% away from all time highs. And so. I think it's just interesting to note, Ian if, if we had a move of minus 20%, so that was the in s and p using futures. So if you go from the February all time high to the intra, I'll call it overnight lows, April 7th minus 20%, and we've rallied about 17%. Doesn't that mean we're 3% away from the all time highs?
ian_1_05-02-2025_115803Yeah, that's common, but no, not how it works.
david_1_05-02-2025_105804That's the math. The, that's not how math works. So we're, we're still 8% away from all time highs in the s and p, you know, we could get there in the next few months. We're not at all. Time will tell. This is a really big level, this 5,600 to 5,800 level on the s and p, and just going back to some of those international. Areas. I mean, it says something that Europe, using IAV is within pennies of all time highs from 2007, so 18 years of 0% return and European financials continue to make new all time highs. You combine that with US financials using XLF, reclaiming a neck line and confirming a false breakdown. I think we gotta, we gotta head into financials here, whether we're talking domestically or internationally. Their strength.
ian_1_05-02-2025_115803Yeah. And is it so. I find it fascinating that financials have held up really well on a relative basis, although, and that's typically a, you know, it would be considered a value oriented sector. But yeah, I mean, a lot of this recovery has been. I would say growth. Oh, growth has outperformed value across
david_1_05-02-2025_105804think.
ian_1_05-02-2025_115803market caps, all market caps. But yeah, you've got financials. I know maybe, maybe financials will become a growth sector.
david_1_05-02-2025_105804Yeah, and we know they have momentum and the momentum factor is still alive and well.
ian_1_05-02-2025_115803But to your point, yeah. Fi internationally, a lot of those indices are weighted towards financials. And that continues to be a massive tailwind.
david_1_05-02-2025_105804For sure.
ian_1_05-02-2025_115803I mean, look at European financials.
david_1_05-02-2025_105804Yep. Continues to record new all time highs. Another one today. The most bullish thing a market can do.
ian_1_05-02-2025_115803speaking of those, you know, monthly candles with big lower shadows, long lower shadows, perfect example right there. Pretty
david_1_05-02-2025_105804hundred percent.
ian_1_05-02-2025_115803mean, pretty big correction. Just
david_1_05-02-2025_105804Yeah. Yeah. You want to talk about bullish eng golfing on a monthly basis? UFN for sure. I mean, we corrected all the way down to 29 spot 89 in UUFN, which eclipsed February of 20 five's, opening price, and then subsequently closed the month at 29 point 89. So pretty crazy. Or I should say, I should clarify, the low was 24 45. The close was 29 point 89. That price action surpassed the prior two months. I mean, that's pretty big. Bullish engulfing on something like European financials, not something that matches the terrible tariff narrative. I.
ian_1_05-02-2025_115803No, it is not. No, it is not.
david_1_05-02-2025_105804And so here, here we sit. European financials look good. Europe as a whole looks good. You have the s and p with financial US financials definitely participating. Like Ian said, a lot of this move from the April lows being led by large cap. And carrying into, I mean, we're still, s and P's still 1% away from a 200 day and 8% away from prior all-time highs. And it's really, I, I don't know. I'm gonna say this probably 20 times on this episode, but this 5,600 to 5,800 level and s and p is critical. So much interaction between buyers and sellers in this area in the past. So we can clear this and go right through it. That's information. And we'll be able to look back. Six to 12 months and and say, wow, look, you know, Marty's wig was onto his game. Like that was
ian_1_05-02-2025_115803Yep.
david_1_05-02-2025_105804a great signal. And if we get a five day closing above a 200 day, our clients know we'll be happy to participate. Time will tell.
ian_1_05-02-2025_115803A lot of failed breakdowns out there.
david_1_05-02-2025_105804Yeah.
ian_1_05-02-2025_115803So if, would you say? I think we talked about, a few of'em obviously talked about Europe. Any domestic winners?
david_1_05-02-2025_105804Well, I think, are you talking about neckline specific? Are you, are you,
ian_1_05-02-2025_115803no. I just mean relative strength wise.
david_1_05-02-2025_105804I think it's interesting, like, earlier this week going through our workbooks as a team, I. Communication services, how they've held up, you know, specifically whether it was things like streaming gaming,
ian_1_05-02-2025_115803Okay.
david_1_05-02-2025_105804know, the, the millennial consumer. If we're looking at discretionary, I would say def defense stocks. Aerospace and defense. You know, you look at things like ITA ITA is going out at fresh new all time highs today, not necessarily bearish there. How about you? I.
ian_1_05-02-2025_115803Defense for sure. Video games. For sure. Gold's I would say gold. Gold miners kind of selling off. IPOs have hung in. There are select few broadly. I would say I would, one thing that surprised me is. You know, we talk about the relative strength that Bitcoin has continued to show, but the Bitcoin miners didn't hold up too well as a whole.
david_1_05-02-2025_105804Right.
ian_1_05-02-2025_115803that might just be a beta thing though, so we'll have to see there.
david_1_05-02-2025_105804Global infrastructure.
ian_1_05-02-2025_115803that was, that was discussed yesterday. So there's definitely pockets there. Of course you know, domestically, I just said global infrastructure, so maybe, I mean, right. There's a hint there. Like nothing from banks yet. Again, I say this as a whole, I think JP Morgan looks great. Sitting right there on that big relative chart, big base. So get kind of giving it another go. I, but foreign. Foreign seems to be where it's at. Some
david_1_05-02-2025_105804Four.
ian_1_05-02-2025_115803has been okay.
david_1_05-02-2025_105804Yeah. I was gonna say is there's some consumer related, you know, streaming. You mentioned gaming. I'll go back to the momentum factor. The fact that momentum held up. During, this
ian_1_05-02-2025_115803Yeah.
david_1_05-02-2025_105804is information, I mean s and p 500 momentum going out at new relative highs.
ian_1_05-02-2025_115803International momentum.
david_1_05-02-2025_105804Yep. So those are, those are great to see. And now it's a matter of, can we. Well, and we had, we also had kind of a flush, you know, there was several episodes again where we asked, you know, were we gonna get a flush first before we moved higher? And was that it was April the flush we were all looking for and now we move higher. Well, if price continues to move higher and we can get above this 5600, 50, 800 blah. I think that's obvious confirmation. You had financials, US financials, break their neck line, reclaim. I think now what you wanna see is you still wanna see. Technology versus s and p follow through. Like it's on the, it's on the verge of confirming a false breakdown. Semiconductors versus the s and p is not quite there yet, but that would be nice to see that reclaim the horizontal level that's been in place since the beginning of 24. These would be, you know, last week we talked about the market having opportunity to surprise if those were. To turn into false breakdowns, and right now we've got financials confirming that tech versus s and p almost doing it. Semiconductors versus s and p trying. Meanwhile, oil not so much. Dollar, not so much. Those have not recovered whether you're using oil futures or DXY for the dollar.
ian_1_05-02-2025_115803Yeah.
david_1_05-02-2025_105804Are still
ian_1_05-02-2025_115803I'm, 58 bucks a barrel. that, I don't think anyone is complaining about that
david_1_05-02-2025_105804no.
ian_1_05-02-2025_115803unless you're long oil. What about rates?
david_1_05-02-2025_105804Yeah. Interesting that they're not buying treasuries. That's just No, that is not happening. Which if they're not buying bonds. It means rates higher, so something like TNXA 10 year treasury note yield back above its absolute 200 day. You look at a longer duration, three year yield sitting nicely above, above. Its 200 day, so not sure that we're gonna get it cooling off in rates anytime here soon. But I will say that we had a little cooling off in Triple C credit spreads. But I, what I find interesting when you look at that,
ian_1_05-02-2025_115803Okay, so this is this coming with an asterisk.
david_1_05-02-2025_105804yeah, it is. How did you know It's like a, a Barry Bonds baseball. If you, if you look at it, we had from the February highs in the market. Triple C credit spreads moved higher, I mean, quite substantially,
ian_1_05-02-2025_115803Huh.
david_1_05-02-2025_105804and they've cooled off, but not to the degree that we're seeing. And it's not a one-to-one relation inverse relationship. I mean, it's pretty all gone close, but the, the, the move we're seeing in US equities. In relation to the cooling that we've seen in Triple C credit spreads also indicates that if these turn back up we may, we just may not be out of the woods, so we'll see. So that's the, the minor asterisk with, that's more anecdotal than hard data. I mean, we went from triple C credit spreads near seven in February to 11 in April, and currently sitting around nine. So some, some pullback in cooling, in credit spreads, which is good. But I would say definitely not outta the woods here yet. And I would expect those to cool more if we're clearing through the 5,600 to 5,800 level.
ian_1_05-02-2025_115803Yeah.
david_1_05-02-2025_105804I'm, I'm in the camp. The thesis that you would, you'd consi you continue to see credit spreads, move back towards that seven level. We have to wait for that information. But again, it's not about markets checking all boxes. You definitely have information in both camps, just how much damage was done in April and what we had to do to recover and that we're still below 200 day moving averages, but we could be above those in the next few weeks. No doubt about it. And it's off to the races the rest of the year and people look back and chuckle about. Is that 20% move? Yep. What else are.
ian_1_05-02-2025_115803out there. I mean, it would, it really, in hindsight, it's if we get a vbo, will make sense. People really, really, really were adamant that, but the noise is so high this, these days. So who knows? Right? And then we gotta come off the context of just had a bear market in 2022, what I would consider a legit long-term. downtrend bear market, so you don't really have the numbers on your side there that we would get another multi-month true bear market just three years later. And then this is kind of, I, you know, the MO since, I don't know, 2018.
david_1_05-02-2025_105804Well, you got
ian_1_05-02-2025_115803to be how we bottom now. A few theories I could come up with around that, but I.
david_1_05-02-2025_105804Well, isn't it interesting that I don't hear a lot of people talking about the fact that we did this correction from the high in February? To the intraday low, and I don't know if people get all weird about like it's gotta be a closing low, but from, yeah, from from February to April 7th, minus 21% on s and p 500 cash. So whether you want to call it a mini bear or what you want to call it, I think you gotta put it down in the data as, as another one. You know, we had 2018 was a correction. 2020 was a correction. 22, 23 was a much larger duration in time and range. I mean, you had a 17% range in that bottoming process. One of the largest we've seen in 50 years. And then this move and, and maybe this is it. Maybe this was a, a bottom and some type of tremor and that's it. But the fact still remains gotta get above a 200 day. Gotta get, get above this. 5,600 to 5,800 level clients are familiar with that. We talked about that in our April education event. That's a really important area to clear and we're in it right now. So market market must confirm.
ian_1_05-02-2025_115803Russell back above, out, you know, sitting at 200. So it's outta this. I mean, it's definitely not out of the woods, but it's above 1 98, which was that base that it's spent two years building. We will see.
david_1_05-02-2025_105804Well, and I'll say like, even if we clear at 200 day, it doesn't mean that the bottom's in, like that's, that's the. Hard part of markets is you don't get to say that was the bottom until we get to new all time highs. But we've got this wig breath thrust that we are looking for. We cleared out of the price action from April 9th. We're on the verge of confirming false breakdowns in technology versus s and PSMH versus s and p. You know, we talked about reclaiming the tariff gap. We did that. The volume weighted average price from the all time highs were through that. Next up is the 200 day, you know, 57, 50 polarity. We've talked in previous episodes about the election gap. So the election gap, you know, is right where we're coming up to. I mean, about 57 80. On s and p Cash. And then if we talk about the beginning of the year zero line that's near,
ian_1_05-02-2025_115803there?
david_1_05-02-2025_105804we're about 58, that's 58, 60 ish, so still some major hurdles here for the market. I guess, I guess the way I, I'd like to say it is if we get up into this area, the election gap, the zero line. The 200 day, the polarity in year 57, 50 and then subsequently roll over. We can't be surprised by that, and it's just simple math. If we can sustain trade above 5,800, that means buyers have regained control of this market. That's a good thing.
ian_1_05-02-2025_115803Agreed. Agreed.
david_1_05-02-2025_105804else? Yeah. Anything else you wanna point our listeners to that you noticed this week or as a whole painting the environmental picture worth highlighting.
ian_1_05-02-2025_115803Yeah. So 200 day on an s and p has started to flatten out. Russell has kind of started to roll over. There's a lot, there is a lot of, a lot has been fixed from a technical perspective. I think you've got a lot of the pieces of a solid bottoming process, including a, a bread thrust. I would even say. This is a little bit more shorter short term, but a day like Wednesday where we had the gap down we had run into pretty good resistance there at like 5,500 ish, I believe. And. Buyers stepped in when they needed to. So I, you know, it could be a selling, ex exhaustion. I guess it really, it really doesn't matter why there are now, more buyers than sellers, but they continue to show up. Interesting approach, though. It's an interesting approach going into a flat 200 day.
david_1_05-02-2025_105804And, and do you mean just because the energy expended to get back to it?
ian_1_05-02-2025_115803Exactly. Exactly.
david_1_05-02-2025_105804Yeah. Brian Shannon's a fan of saying, where has it come from?
ian_1_05-02-2025_115803Mm-hmm.
david_1_05-02-2025_105804You know, where has price come from? And in one month we've gone from a 20% correction, still well below the all time highs, but. Expended a lot of energy to get back to a 200 day. Now this is where the rubber meets the road. You know, if, if it, if it is a bottoming process the easy part might be done. But there's still plenty of work to do up in these levels that we're approaching now
ian_1_05-02-2025_115803There
david_1_05-02-2025_105804sure. And you, and you look across. You know, different areas and it, it's interesting to note just how weak transportation stocks are.
ian_1_05-02-2025_115803Mm-hmm.
david_1_05-02-2025_105804I mean, they're having, they're having a nice,
ian_1_05-02-2025_115803Yeah.
david_1_05-02-2025_105804they're, they're having a nice day to day. But they're relative performance. I mean, they're, they're really at this critical point where they had just recorded relative all time lows versus the s and p that go back to March of oh four. But is this some type of false breakdown in that relationship and we see transportation get going? That would definitely be a, a tailwind for the market if, if transportation stocks can get going. And then I look at things like Home Depot and Lowe's on a relative basis. And right here, right now, kind of where they need to start to find relative strength. Starbucks versus s and p. Looks like no one wants to buy coffee anymore.
ian_1_05-02-2025_115803Terrible.
david_1_05-02-2025_105804United Healthcare, I mean the, the largest component I believe
ian_1_05-02-2025_115803Yeah.
david_1_05-02-2025_105804the Dow Jones.
ian_1_05-02-2025_115803how is the Dao gonna, I mean, that's gonna be a big looming wall to fight through if the stock cannot get his act together
david_1_05-02-2025_105804Yeah.
ian_1_05-02-2025_115803specifically.
david_1_05-02-2025_105804For the Dallas specifically, and I, and I should correct myself, it was the largest piece. It's now the third largest during this corrective phase, I mean, we, in three short weeks, UnitedHealthcare has sold off 33%. I. And like you said, that's gonna be a
ian_1_05-02-2025_115803number four, though.
david_1_05-02-2025_105804Yeah, correct. Home Depot is in there.
ian_1_05-02-2025_115803Uh
david_1_05-02-2025_105804Um,
ian_1_05-02-2025_115803I know one theme you brought up this week was the, the credit card companies look good.
david_1_05-02-2025_105804yep. They do Visa, MasterCard, discover, you know, another feather in the cap for financial stocks.
ian_1_05-02-2025_115803Yeah.
david_1_05-02-2025_105804I. So not, not too shabby there for sure. But yeah, Dow Jones the weakest of the group. If we're looking outside of small caps, we shall see,
ian_1_05-02-2025_115803We shall.
david_1_05-02-2025_105804uh, Bitcoin and Ripple continue to hold up. Well, when we look at crypto markets. Momentum factor, like we talked about, still holding up well and we've reclaimed some important levels. Now it's really rubber meets the road. Can we clear this 56 to 5,800 level on the s and p? And if it doesn't pause here either, like if it's just a hot knife through butter, that's tremendous information on just, maybe that was an exhaustion. Move.'cause going into, you know, you highlighted this for clients going into April 2nd and those tariff announcements, the market was already off 8% and, and you had pretty low participation. You know, you had many, many stocks in the s and p 500 already in a 20% correction, you had bullish percent low. So really negative breath out there. And maybe that was just a flush to shake out the last sellers. And like you said, that's some type of selling exhaustion that took place in April. And all you did was just get everybody, there's no more selling going on, and all that's left are buyers and now it's off to the races for the next 12 months. Perfectly open to that, and the way we confirm that is getting back above this 5600, 5800 level on the s and p. There'll be tremendous opportunities if that's the case.'cause international's holding up, well, momentum's holding up well plenty of opportunity for the remainder of the year if we can accomplish that.
ian_1_05-02-2025_115803Agreed. Agreed, agreed.
david_1_05-02-2025_105804I do wanna pause and highlight the supporter of this podcast, the Adaptive Select ETF, listed on the New York Stock Exchange under ticker A DPV, which helps investors access to the most prevalent factors in markets, momentum and relative strength. Through proprietary identification methods, the Adaptive Select ETF attempts to own the strongest 25 large cap stocks when the market is in an uptrend. And since not all market environments are the same, adaptive select seeks to prevent extended declines by moving to short-term treasury bills in cash during long-term market Downtrends investors can find out more including how to invest in ad PV by visiting ad pv etf.com or calling 1-833-880-FIVE 200. Investing involves risk, including possible loss of principle ATVs distributed by Quasar Distributors, LLC. Alright, with our time wrapping up here, Ian, anything else you'd like to highlight for our tremendous listeners before I ask them to give us a high ranking?
ian_1_05-02-2025_115803No, I think it was great save by the market. What was looking pretty atrocious mid-month. Buyers came in. And again not out of the woods yet, but there's evidence that we are getting close to the tree line. So we will continue to see few more final pieces, to fall in place, and we will be able to say that. Was that on the tariff scare of 2025?
david_1_05-02-2025_105804Yeah, for sure.
ian_1_05-02-2025_115803Or this
david_1_05-02-2025_105804And that,
ian_1_05-02-2025_115803and we get another who knows how long of craziness.
david_1_05-02-2025_105804right. It's really about confirming if the buyers are for real and the sellers are gone near this 5,600 to 5,800 level. So as technicians, we just study supply and demand and watch if that's the case. So far so good. I'll say that.
ian_1_05-02-2025_115803Yep.
david_1_05-02-2025_105804So appreciate you having me on here again, Ian, thanks to everyone listening. It's a compliment to us if you share this with your friends. And otherwise if you could give us a high ranking on your platform of choice, we would appreciate it. Otherwise, until next week enjoy your weekend.
ian_1_05-02-2025_115803Have a great weekend everyone.