Weekend Report for Monday, February 24, 2025
Bottom Line:
The US stock indices were hammered on Friday, finally breaking out of Balance Areas of multiple degrees. We should see lower prices, but how much lower cannot be determined at the moment. We can KNOW that Friday’s highs in the respective indices are the level that cannot be broken under any bearish assumption. Retracement of some degree into today’s range is certainly a possibility but trying to guess how deeply is just that – a guess.
It is also possible to see another wide range down day to put in a short-term capitulation-type low. Market internals have plenty of downside room before they get to anything resembling extreme readings.
PDF: Weekend Report_2025_02_24
VIDEO: https://youtu.be/9hvr_-RSVL4
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SPX
Upper KRA: 6116
Lower KRA: 6010-5992; 5923-5845
The SPX closed in a downside KRA consisting of several previous lows. Below this level is another elevator shaft and an important area that begins at about 5923.
RSP Weekly (Equal Weight S&P 500)
Upper KRA: 183
Lower KRA: 177
The RSP topped last October and it’s reflective of the need for more than a handful of stocks to rally if the bull market has much more room to run.
NDX
Upper KRA: 22117
Lower KRA: 21489-21402; 21056-20963
Same comments apply to NDX as SPX.
DOW
Upper KRA: 44178-43921
Lower KRAs: 42934-42513
From last weekend’s Report:
The DOW is at the apex of a HVN of an increasingly mature Auction structure. I have a difficult time envisioning the break being counter to the next multi-day move in the SPX and NDX.
Somehow the DOW managed to stay coiled right around the HVN of the structure highlighted above until Friday. Then we got the inevitable break. This was a classic Auction Market break from mature Balance.
RUT
Upper KRA: 283
Lower KRA: 2178-2159
From last weekend’s Report:
The RUT is also in a very mature structure and due to trend.
New York Composite
Upper KRA: 20155
Lower KRAs: 19644
Internals – NYSE Data
Both the 10-day and the 5-day MAs of NYSE advancing issues have plenty of downside room before reaching anything resembling “extreme”. This does not mean the market can’t turn back up from Friday’s low, but it most certainly is supportive that the market has plenty of room to the downside.
Cumulative NYSE Adv/Decl
From last weekend’s Report:
This divergence continues to linger.
The cumulative NYSE adv/decl line is diverging against the higher highs in the SPX (SPY is shown), more evidence suggesting caution.
This will continue to be important to monitor going forward.
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US Dollar
Between critical intermediate-term levels.
US 10-yr Notes
In general I would continue to favor shorts, but not a great set-up at the moment.
Gold
Gold is Balanced. The area around 2886 is a short-term critical downside area.
Crude
Favor shorts.
Bitcoin
