Market Triangle | 05.13.2025
A proprietary model that evaluates the current state of the market using three core components — Trend, Breadth, and Momentum.
No major changes today, but the underlying strength continues to build.
Short- and medium-term trends remain firm, breadth is expanding, and momentum continues to improve — all while volatility stays low. That’s a solid setup for sustained moves, even though the longer-term (200D) trend still lags behind.
⦿ Trend → Short- and medium-term structure is improving, but the macro trend remains cautious.
Short-term (5D) → Positive
Medium-term (20D & 50D) → Positive
Long-term (200D) → Still Negative (sluggish to reverse)
⦿ Breadth → Breadth expanding across all timeframes, signaling broad-based participation.
4% Week → Positive
25% Quarter → Negative
52w NHL → Positive
⦿ Momentum: Momentum is building with stability — a favorable backdrop for sustained moves.
Velocity → Positive
Volatility → Positive (low and declining)
Markets are quietly strengthening. Risk appetite is returning, but don’t chase blindly — the long-term structure still needs confirmation. Tactical mindset over euphoria is the way forward.
Broader Market Analysis
Strength Showing In:
Tech (XLK): +2.16% on the day, breaking above all key SMAs. Momentum Internals (M-IO) also leading at 11.50% — shows strong leadership.
Discretionary (XLY): +1.32%, solid M-IO at 7.58%, flipped all SMAs. Bullish shift as risk appetite returns.
Energy (XLE): +1.41% — quietly rebounding from oversold conditions, now testing near resistance.
Mixed:
Financials (XLF), Industrials (XLI), Materials (XLB): Showing short-term gains, but still need follow-through on medium/long-term SMAs.
Midcaps (MDY) and Russell 2000 (IWM): Both green on the day and aligning with short/mid SMA trends — supportive for broader risk-on narrative.
Weak Spots:
Healthcare (XLV): Down -3.01% today, underperforming and below all key SMAs. Momentum negative.
Staples (XLP) and Real Estate (XLRE): Red on the day, below 50/200 SMA — defensive sectors are losing steam.
Leadership is shifting decisively toward risk-on sectors, with technology and consumer discretionary stocks showing strong price action, positive momentum, and alignment across short-, medium-, and long-term SMAs. This rotation is supported by growing participation from small- and mid-cap stocks, as seen in the improving trends for MDY and IWM. At the same time, defensive sectors like healthcare, staples, and real estate are lagging, signaling waning investor appetite for caution. Overall, the market is stabilizing and risk appetite is broadening, but longer-term trends are still in the early stages of reversal. This environment favors a tactical approach—lean into strength, but remain selective and nimble.
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