SPY long-term trend positive; near-term technicals (RSI/MACD divergence) indicate potential pause/dip, not panic.

So last week this week actually so this is yesterday plus about 45 minutes of trading of today is hooking spy back down. And you see a quite a similar picture in g and liquidities.

So at the top line with spy remaining completely on the right hand side which basically tells us that relative strength for spy versus vbinx which is our benchmark in this in this framework is still positive mildly positive because it's on the right hand side the momentum is not all that it's like literally zero or just slightly declining so not nothing much in the momentum space

A quick look at a few of the price charts starting with SPY. And here is SPY with relative strength versus VBINX. And you see this super long relative uptrend, very stable relative uptrend with a few interruptions.

Well, pretty much two, like here in the middle of 2022, which was this period here where that relative strength line rolled over and then again very briefly here in the start of 2025.

Other than that, this is a long winding grinding relative uptrend.

So why is it not a full-fledged outperformer? because we are losing some of that momentum and it looks like we're putting in a lower high in the RS ratio scale. So for the near-term, so the long term is definitely an outperformer for stocks, but in the near term, it looks as if there are better opportunities in this asset class framework.

If we look at the outright price chart of SPY, then we see that since setting that new high, which was August 13, we're winding down and we're now sort of resting at support offered by that previous high, those going to make that two previous highs back in June.

And so start of June and the 15th of June. So this is the daily chart. RSI goes nowhere. MACD is showing a negative trend.

If we do that for the weekly chart, it becomes a little bit more pronounced. You see that we're still resting at that support level around I'm going to make that 760 75970 right now.

So, we're at support right now. So, where the what the market's going to do around this level is going to probably dictate the next couple of weeks of price movement.

And the negative thing that so the the reason to not become overly bullish yet on stocks is um the the rollover in relative strength but also this negative divergence between the RSI and price and the MACD and price of SPY.

This is usually something. It's not necessarily a an immediate turn of the trend from positive to negative, but my experience is that it is almost always at least a a a little bit of a pause and a little dip.

We've had the same situation at the end of 20 2025 here where we had that mildly higher high in the price and a negative divergence in SPY as well as a negative divergence and a sell signal in the MACD. And we're seeing quite a similar situation.

So, I mean, if this 760 level is not going to hold, I think that that 700 area, and I do realize that that's a pretty big move, but in the bigger scale of things, in the bigger scheme of things, it's not that big of a move.

You know, we've seen that SPY rallying like for a couple years already. So, even if we go touch 700 somewhere here, we can draw that rising trend line.

And then you know I always try to imagine you know if this is this is a like 60 points this a serious move in in spice it's almost 10%. But what I'm trying to do in these situations is trying to visualize going ahead and then when we look back for example here when we look back here we go from 700 to 630 that's 60 points as well that's that's again close to 10% 8 9%.

If we now look and we put this into a perspective into a longerterm perspective, we all say like, "Ah, that was a nice corrective move. Nothing special." While at the point here when this is happening, we're all at least I'm getting a little bit of nervous like, "Oh my god, we're going to break that trend.

We're going to break this trend and blah blah." And then all of a sudden, you bottom out that we didn't even get to that previous to to the support that was offered by the previous resistance.

So this was already a sign of strength because buyers were coming back earlier than that 613 level and we are in the same situation right now.

So longerterm trend still very positive definitely from a relative perspective but also from a price perspective and even if we're going to work our way down 60 points in the S&P 500 obviously the relative strength depends on the other sectors in the in the asset classes or the the the other groups in the asset classes but I don't think there's any reason for panic yet.

And if that works, if that's going to happen, that'll be the catalyst for SPY to finally move higher or continue to move higher. This sector, the technology sector, will be crucial for the further development of SPY.

If technology remains in the doldrums, I don't think there'll be a very strong rally for SPY. If Axel K is able to turn this thing around, turn around strength around and break above 193 194, that'll be the catalyst for a renewed rally in uh SPY and in the stock market.