Did The Market Just Lose Its Footing?
One week ago this looked like a rough patch. This week the chart is telling a different story — and the sectors confirm it.
MACRO
The conflict in the Middle East is not ending anytime soon — and right now, that’s the most important variable for markets.
Photo by Jens Rademacher on Unsplash
Oil and gas prices have spiked. Some experts are projecting 1–2% additional inflation over the next few months if the situation drags on. Weak US employment data adds to the pressure. Suddenly, the picture for stocks looks very different from what it did a few weeks ago.
Strong structural themes like AI and Robotics aren’t going away. But the near-term backdrop — the next 3–6 months — could get disrupted if the war continues. I’m not making a prediction. I follow prices, not scenarios. But it’s worth being aware of the environment we’re operating in.
The most practical thing to monitor: the price of oil. A prolonged spike could trigger inflation and push economies closer to recession territory. A quick resolution, on the other hand, could inject genuine optimism back into global markets. Either outcome is possible. Worth watching carefully.
One number to keep in mind: roughly 20% of the world’s oil passes through the Strait of Hormuz.
Setting aside any personal feelings here — it’s painful to see so many lives lost and communities torn apart by war.
INDEX AND SECTORS
S&P 500 weekly (Stage Analysis lens)
1) Stage Call
Primary trend: No longer a clean Stage 2 uptrend.
The S&P 500 has now slipped below the rising 30-week moving average (around 6754), which is an important change.
Best label now: Stage 3 warning / transitional phase.
It is not a confirmed Stage 4 bear yet, because the 40-week moving average (around 6614) is still rising and price is still above it. But the prior uptrend has clearly weakened.
Short-term condition: Corrective and vulnerable.
Price is below the:
10-week MA ~ 6892
20-week MA ~ 6849
30-week MA ~ 6754
Analogy: Last week the uptrend looked bruised. This week it looks like the trend has lost its footing.
2) Key Levels That Matter
Immediate resistance:
6754 area first, because that is the lost 30-week MA
Then 6849–6892, where the 20-week and 10-week MAs sit
Above that, the market would still need to reclaim the higher area near the prior highs
First support:
This week’s low near 6710
Then the 40-week MA around 6614
Line-in-the-sand support:
6614–6555 zone
If the S&P 500 loses that area decisively, then the odds rise that this is no longer just a correction, but the start of something deeper.
3) What the “Tape” Is Saying
The message is clear: distribution is present.
What stands out:
Weekly close below the 30-week MA
Volume stayed above average
MACD is negative and still deteriorating
RSI is around 50, which means the market is not washed out, just weak
So this is not panic selling, but it is also not healthy bull market action.
In Weinstein language: this is not the kind of tape where you want to be pressing hard on the long side.
4) Implications for the Next Few Weeks
Base case:
The market remains in a correction / sideways-to-down phase, likely oscillating between roughly 6615 and 6890 unless something changes.
Bullish tell:
A quick reclaim of 6754, then 6849–6892, with broader participation.
Bearish tell:
A decisive break below 6614, and especially below 6555.
If that happens, the correction likely extends and the market starts to look much more like a true Stage 4 risk.
Sectors — what leadership looks like now
1) Leaders (where money is still flowing)
Energy (XLE): Still the strongest group.
It remains the clearest leader on a 3- and 6-month basis. In the current geopolitical backdrop, that makes sense.
Utilities (XLU): Strong. Classic defensive leadership.
Low Volatility (SPLV): Strong. Another sign that money is being cautious.
Real Estate (XLRE): Still constructive.
Not exciting, but holding up better than many cyclical groups.
Communication Services (XLC): Improving.
Not a true leadership group yet, but it is acting better than tech and financials.
Important point:
This is not broad offensive leadership. It is mostly energy + defense. That is a warning, not a comfort.
2) Laggards (where risk remains highest)
Financials (XLF): Weakest major sector.
Very poor 1-month, 3-month, and 6-month picture. This is important because weak financials often make it hard for the broader market to stay healthy.
Technology (XLK): Weak.
Negative on the 1-month and 3-month view. Not what you want in a strong bull phase.
Consumer Cyclical (XLY): Weak.
Still lagging badly.
Materials (XLB) and Industrials (XLI): Took a hard hit this week.
They had looked constructive before, but that damage matters. These are economically sensitive groups, so their weakness is another caution sign.
Health Care (XLV): Mixed to weak.
Not acting as a true leadership area.
3) The Two Key Ratios
Confidence Ratio (XLY/XLP): Still BEARISH
Yes, it bounced a bit this week, but the bigger trend is still poor. Cyclicals continue to lag staples. That says confidence is still weak.
Risk Appetite Ratio (SPHB/SPLV): Still BULLISH, but softening
This tells us risk appetite has not fully collapsed. But the weekly drop says it is fading, not strengthening.
So the message from the ratios is:
confidence = weak
risk appetite = not dead, but cooling
That fits the chart perfectly.
Net Takeaway
This market has changed.
Last week the S&P 500 still looked like a messy Stage 2.
This week it looks more like a Stage 3 correction with real downside risk if support breaks.
The sector picture confirms it:
Strength is concentrated in energy and defensive groups
Weakness remains in financials, tech, and consumer cyclicals
That is not the profile of a healthy broad bull market
Bottom line
The S&P 500 is no longer in a clean buyable uptrend
The 6614–6555 zone is now the key support band
New buys should be rare, selective, and small
Capital preservation matters more than aggressiveness here
PORTFOLIOS
10X MOMENTUM PORTFOLIO
Last week both stop losses for PSIX (-8.6%) and INCY (-9.1%) were triggered. That put me back to roughly 60% in cash, which, given this environment, feels like the right place to be.
My Buy Stop order for SNDX was triggered and the stock held well through the week. WT continues to hold up nicely.
I'm not changing stop loss levels this week, and I'm not forcing new buys in this environment.
That said, I'm watching LQDA, ZETA, PAYS, and IVVD — they're acting better than the broader market and could be worth a small position if the tape improves. Let's see how the week unfolds. Below is the current scorecard.
That’s all for the week! See you next week!
Important: This is not investment advice. Please consult a licensed financial advisor before making any investment decisions.
Disclosure: The content has been reviewed using artificial intelligence to enhance readability and ensure grammatical accuracy.