As the year 2024 drew to a close, our investment portfolio surged by an impressive 29.28%, surpassing the S&P 500’s 23.67% climb. This stellar performance comes on the heels of a strong 2023, where we delivered a 28.12% gain, outshining the S&P 500’s 23.38% rise. The momentum shows no signs of slowing down as we enter 2025, with key technical indicators pointing towards a continued bull market.
Analyzing the Market Signals
The Zweig Breadth Thrust (ZBT) recently flashed a bullish signal, a rare but potent indicator that measures momentum shifts in the NYSE. This signal was triggered when the 10-day average of advancing stocks surged from 0.41 to 0.61 in just six days. Historically, a ZBT signal only occurs in bull markets and often signifies pivotal support levels. The rally that began near the year’s low on January 13 further reinforces the idea that the market may have found its footing.
Key Support and Resistance Levels in Focus
The market continues to hold key support near the 583-592 level on SPY, as indicated by bullish TRIN closes. Traders should keep an eye on retesting gaps marked in pink on the chart, as they could provide potential entry points. The recent push to a new short-term high above early December’s peak, coupled with a higher low, introduces a bearish divergence. Historically, when the SPY hits its outer Bollinger Bands, a reversal often follows, setting up the next major buying opportunity. Seasonal trends suggest that the next robust setup may emerge later this week or early next week, making it crucial to stay alert to these levels.
GDX (NYSE:): Short-Term Trend Points Up
Turning to gold miners, GDX shows continued strength. Both the 18-day averages of up/down volume percent and advance/decline percent are comfortably above -10, indicating a bullish short-term trend. Interestingly, both indicators recently broke above their previous highs, suggesting that GDX could soon challenge and surpass its recent highs, offering potential upside for traders.
Bottom Line
The confluence of key technical signals, including the ZBT and bullish GDX indicators, reinforces a bullish outlook as we progress into 2025. While short-term pullbacks and gap-filling are expected, the broader trends indicate strength ahead. Traders should be on the lookout for opportunities at support levels or during seasonal setups to position themselves for the next leg higher.
Analysis:
In summary, the market outlook for 2025 appears promising, with key technical indicators signaling continued bullish momentum. Understanding these signals and support/resistance levels can help traders make informed decisions and capitalize on potential opportunities. By staying vigilant and leveraging seasonal trends, investors can position themselves for success in the ever-changing financial landscape.