This page will be updated every Sunday by 5 PM ET with our weekly outlook and positioning.

WEEKLY TREND OUTLOOK
4/27/25

S&P 500 Index (SPX):
Potential long-term bottoming process underway.
(1) Our post from 4/11/25, here, that the massive volume reversal week ending 4/11/25 resembled other major bear market lows, continues to hold.
(2) Other bullish price signals this week were that SPX and NDX both made higher weekly highs and higher weekly lows vs the 4/11/25 recovery week.
(3) A Zweig Breadth Thrust was triggered in the NYSE on Thursday. There is a very bullish breadth reversal signal with a 100% success ratio 12-months forward. More details here.
(4) SPX closed the week over 5500, which is a key technical resistance level. Post here.
(5) There is a “Trump Put” in the markets at SPX 4800-5100. We saw that with the 4/9/25 90-day tariff pause and 4/22/25 slight walk back of the China tariff and Jerome Powell narratives.
(6) With Tuesday’s China tariff slight walk back by the White House and subsequent market reaction, our defensive sectors overweight has been rescinded.
Key SPX factors going forward:
Our technical view that the 4/7/25 lows at 4835 should hold will be based primarily on three factors:
(1) No major regression in the global trade tariffs talks. No walk back of the 90-day tariff pause. No major escalation vs China.
(2) No major corporate earnings misses or major guidance downgrades over the next few weeks, especially in the Nasdaq 100 mega cap leaders.
(3) That the U.S. economy avoids a recession or major slowdown in 2025 and that the U.S. labor markets stay strong.
There are always other outliers, including inflation, but these are the three data points that we are most focused on.
Expect daily volatility ranges of 2-3% at any time. SPX is more cautionary below the 40-week moving average.
Focus list sectors: Select technology sector and growth stocks over the 50 and 200-day moving averages, gold, gold miners, select low volatility/high dividend, defensive stocks in staples, healthcare, utilities and telcos. Bitcoin and related stocks.
Nasdaq 100 “Mag 7” Stocks: Neutral, but possibly improving.  All seven are below the 40-week moving average currently, but had strong weeks.
US Treasury Market/Bonds: Neutral. In a trading range below the 40-week MA. Could benefit if the economy slows down, but inflation concerns from tariffs have been a negative headwind for bond prices.
Gold: Buy/accumulate. Long-term uptrend, new record highs last week.
Crude oil: Neutral to avoid. Weekly downtrend below the 40-week MA. Counter-trend bounces are possible.
Bitcoin: Buy/accumulate. Bitcoin cleared our $90K breakout level, which generated a new buy signal.
Fed rate cut outlook: The Fed funds futures market is pricing in 64.3% odds of a 25-bps rate cut at the 6/18/25 Fed meeting.
Key items of note this week: Corporate earnings reports, (Weds.) GDP, PCE inflation, (Fri.) monthly payrolls report.

SUMMARY:
We continue to add equity exposure, since April 9, with an improving technical outlook. Our technical view is that the extreme volume selling flush and reversal in the week ending 4/11/25 is similar to how other bear markets have ended. The NYSE Zweig Breadth Thrust this week is a major technical event that we do pay attention to. There is a “Trump Put” at SPX 4800-5100 which could provide a floor as well. Investors should continue to expect wide daily ranges or headline related pullbacks, but volatility is starting to subside. Markets still need to work through the corporate earnings cycle and the unknown effects of this tariff cycle on the economy and labor markets.

POSITIONING

• Maintain somewhat defensive positioning, with SPX below the 200-day MA, but with an improving outlook.
• Continue to increase equity exposure and scale into positions.
• Continue to expect wide daily volatility ranges, although possibly reduced, news driven volatility and frequent sector rotations.
• In equities, investors should focus on high earnings quality stocks, primarily in high-quality growth and technology stocks, as well as select lower volatility and defensive sectors.
• Cyclicals (banks, energy, industrials) could be much more dependent on incoming economic news, which is still an area of concern. More on our preferred sectors below.
• We plan to maintain an index hedge (index put options) while the S&P 500 remains below the 200-day moving average.
• From a fundamental perspective, markets still need to work though the earnings cycle and incoming economic and jobs data, but the tariff news cycle has been moderating.

MAXIMUM TARGET ALLOCATIONS
Updated weekly current as of 4/27/25
Note: These are our target maximum allocations. They are subject to update based on the news cycle.
This does not include all equity sectors, and it is not intended to total 100%.
These are our high-end target limits.

• Cash: up to 15% as long as SPX and NDX are under the 200-day moving average.
• Higher quality, large cap growth and technology sector charts: up to 25%
• Lower Volatility/Higher Dividend/Defensive Equity Sectors: up to 20%
• Gold and gold miners: up to 10%
• Bonds: 0 to 10%
• Bitcoin: up to 5%
• Index put options (for hedging accounts): up to 2%

SECTOR/ASSET ALLOCATION
Equal to Overweight sectors:

• High earnings quality growth stocks over the 50 and 200-day MA.
• Low volatility, low valuation and/or high dividend defensive sectors.
• Bitcoin and related stocks.
• Gold and gold miners
• Index put options (for hedging accounts)

Neutral to Underweight sectors:

• Banks
• Consumer discretionary
• Energy
• Industrials

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4/20/25
WEEKLY TREND OUTLOOK

S&P 500 Index (SPX): Potential long-term bottoming attempt underway. If the U.S. avoids a recession will probably determine if the recent low at 4835 holds. A major selling flush and reversal + highest weekly volume in 14 years, the week ending 4/11/25. Expect daily volatility ranges of 2-3% at any time. SPX is more cautionary below the 40-week moving average. Potential wide trading range between 4900-5600. Focus on stock selection.
Sectors to overweight vs the index: Cash, gold, gold miners, select low volatility/high dividend, defensive stocks in staples, healthcare, utilities and telcos.
Sectors to underweight vs the index: High beta technology, cyclicals: energy, industrials, banks.
Nasdaq 100 “Mag 7” Stocks: Underweight. All seven are in weekly downtrends below the 40-week moving average.
US Treasury Market/Bonds: Neutral. In a trading range below the 40-week MA. Could benefit if the economy slows down, but inflation concerns from tariffs have been a negative headwind for bond prices.
Gold: Buy/accumulate. Long-term uptrend, new record highs last week. Possibly extended in the near-term.
Crude oil: Avoid. Weekly downtrend below the 40-week MA. Counter-trend bounces are possible.
Bitcoin: Hold: Above the 40-week MA. In a trading range between 75K – 90K. Potential range breakout if over 90K.
Fed rate cut outlook: The Fed funds futures market is pricing in 61% odds of a 25-bps rate but at the 6/18/25 Fed meeting.
Current positioning: Maintain defensive positioning with SPX below the 40-week MA. Hold extra cash, index hedges, and overweight defensive sectors.  Smaller position sizing, scale into any new buys.

SUMMARY:
Our technical view is that the extreme volume selling flush and reversal in the week ending 4/11/25 is similar to how other bear markets have ended. From a fundamental perspective however, there are too many unknows with respect to the tariff news cycle, corporate earnings guidance and if the U.S. economy will enter a notable slowdown or recession. Charts and price data alone cannot predict news flow. This is a unique period in market history, going into global trade negotiations with above target inflation. Based on the uncertainty of the tone and duration of the tariff negotiations and unknown impact on the global economy, we are still maintaining defensive positioning, but with an improving outlook.

POSITIONING

• Maintain defensive positioning, but with an improving outlook.
• Continue to expect wide daily volatility ranges, news driven volatility and frequent sector rotations.
• In equities, investors should focus on high earnings quality stocks, primarily in defensive sectors as well as high-quality growth and technology stocks.
• Cyclicals could be much more dependent on incoming economic news, which is still an area of concern. More on our preferred sectors below.
• Look to increase equity exposure and scale into positions.
• We plan to maintain an index hedge (index put options) while the S&P 500 remains below the 200-day moving average.
• From a fundamental perspective, we still have concerns about the volatility of the tariff news cycle and potential economic uncertainty.

MAXIMUM TARGET ALLOCATIONS
Updated weekly current as of 4/20/25
Note: These are our target maximum allocations. They are subject to update based on the news cycle.
This does not include all equity sectors, and it is not intended to total 100%.
These are our high-end target limits.

• Cash: up to 15%-20% as long as SPX and NDX are under the 200-day moving average. Reduced this week.
• Higher quality, large cap growth and technology sectors charts: up to 25%
• Lower Volatility/Higher Dividend/Defensive Equity Sectors: up to 20%
• Gold and gold miners: up to 10%
• Bonds: 0 to 10%
• Bitcoin: up to 5%
• Index put options (for hedging accounts): up to 2%

SECTOR/ASSET ALLOCATION
Equal to Overweight sectors:

• Cash
  
• Low volatility, low valuation and/or high dividend sector
• High earnings quality growth stocks over the 200-day MA
• Gold and gold miners (May be extended near-term)
• Index put options (for hedging accounts)

Underweight sectors:

• • Technology
  • Banks
  • Energy
  • Traditional cyclicals (industrials and consumer discretionary)

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AS OF THE 4/9/25 90-DAY TARIFF PAUSE, ALL INFORMATION BELOW IS UNDER REVIEW.

4/6/25
April 2025 Tariff Investors Guide – Blue Chip Daily Trend Report

The 4/3/25 and 3/2/25 Defensive Rotation blog are below.

4/3/25
Following the U.S. tariff announcements yesterday, which came in higher than forecast, we expect that the markets will continue to rotate into defensive stocks and sectors and out of many cyclicals, high valuation stocks and high beta tech. We don’t expect these to be straight line moves, but this tariff cycle could take some time to develop. I am moving our economic slowdown/recession probability in 2025 up to 50%, from 30%.  In this environment, I would expect lower volatility and traditional defensive sectors to outperform (consumer staples, traditional utilities, telecommunication services, and lower volatility healthcare).

Note: This is based on currently available data. If there is a major change in the tariff outlook or narrative, these views could change quickly. Also, markets are trading in very wide ranges. Higher volatility in almost all charts is expected currently.

Gold: From a fundamental view, we expect Gold to remain a beneficiary of global macro uncertainty from a potential tariff trade war. On a technical level, Gold is in a confirmed uptrend, and it is constructive here and on pullbacks. This is a high conviction idea.

Bonds: We expect a notable slowdown in the U.S. economy in 2025, from tariff related concerns. Also, large cuts in U.S. government jobs and large cuts in U.S. government spending. Bonds have not yet broken out in 2025, due to inflation concerns from tariffs, but we expect that they will start to break out shortly. This is a medium conviction idea.

Overweight sectors:
Low volatility, low valuation and/or high dividend
Consumer staples
Traditional utilities
Telecommunication services
Insurance
Lower Volatility healthcare
Gold

Underweight sectors:
High valuation and high beta growth stocks
Technology
Banks
Traditional cyclicals (industrials and consumer discretionary)
Speculative growth stocks

Updated defensive ideas tracking list
ALL, BMY, BRK/B, BTI, CAH, CCEP, CNP, COR, EXC, MCK, MO, NVS, PM, T, VZ, WELL
GLD, TLT

ORIGINAL MARCH 2, 2025 POST AND VIDEO IS BELOW
3/2/25

VIDEO: https://bit.ly/BCDDefensiveRotationVideo3225

Note: This blog and video discusses the recent market rotation into bonds and traditional defensive sectors in the stock market. There is no assurance on our end that this rotation will continue, but it is something that investors should be aware of and should prepare for, in the event that it does follow through. We saw a similar defensive rotation in mid 2024 that did not follow through.

We have gradually increased defensive and/or lower valuation positions over the past two weeks, and we could raise that exposure if the rotation continues.

WATCH INCOMING DATA

• If incoming economic data and/or labor market data weakens, then we would expect the recent defensive rotation to continue.
• Conversely, if incoming economic data and/or labor market data comes in above forecast, markets could reverse some or all of this rotation.
• We do not have a prediction on the incoming data. Our specialty is the technical analysis of market trends, but not economic forecasting.

Over the past 7 weeks, there has been a defensive rotation in the markets, highlighted by four keys factors:

1. 10-year US Treasury Yields (TNX) pulled back by 59 basis points, from a recent peak at 4.80 on January 14, to a recent low point of 4.214 on February 28. TNX closed at 4.231 on Friday, – 57 basis points from the recent high.  

• Bond yields tend to trade lower either when inflation expectations come down and/or economic growth expectations slow down.
• The fact that yields have pulled back after a higher than forecast CPI report in February tells us that there are economic growth concerns.

2. Bond prices are rising.

• iShares 20+ year Treasury Bond ETF (TLT) is +9.26% over the last over the last 7 weeks.
• Bonds move in the opposite direction of bond yields, so this over is directly tied to the pullback in bond yields.
• Bonds are considered a “safe haven” in times of an economic slowdown.

3. Defensive sectors in the stock market are outperforming.

• Defensive sectors are considered more reliable in terms of sales and earnings growth and are considered less reliant on the overall economy.
• Defensive sectors are considered to be consumer staples, healthcare, real estate and traditional utilities. Telecommuncation services stocks, discount retailers and insurance stocks are often considered defensive as well.
• The market generally takes the view that if the economy and/or payrolls market weakens considerably, consumer may delay the purchase of a new home or a new car, but they will continue to buy groceries, pay their electricity bills and auto insurance, and continue to get healthcare.
• Cyclical sectors (often tied to economic growth) could underperform. These sectors include industrials, financials, including banks, consumer discretionary, energy and small cap stocks.

4. Low valuation stocks, lower volatility stocks and/or high dividend stocks also tend to perform well in defensive rotations. Low price-to-earnings (PE) ratio stocks often see less valuation compression in slowdowns and high dividends are considered an attractive part of an overall total return.

Returns since the January 13/January 14, 2025, inflection point:
CBOE 10-year UST Yields (TNX) -57 basis points
iShares 20+ year Treasury bond ETF +9.28%
S&P 500 ETF (SPY) +3.27%
Nasdaq 100 ETF (QQQ) +1.69%
SPDR Real Estate ETF (XLRE) +10.49%
SPDR Consumer Staples ETF (XLP) +9.60%
Invesco S&P High Dividend Low Volatility ETF (SPHD) + 8.13%
SPDR Utilities ETF (XLU) +7.86%
SPDR Healthcare ETF (XLV) +7.23%

The above noted charts are shown below, from the beginning of 2025 through Friday’s close.

Select defensive sector ideas: