S&P 500: Bull Market Signal? Key Indicators Suggest Support Is Holding

The market ended 2024 on a high note, with our portfolio gaining 29.28% compared to the S&P 500’s 23.67% climb. This outperformance follows a strong 2023, where we delivered a 28.12% gain, outpacing the S&P 500’s 23.38% rise. As we kick off 2025, key technical indicators are hinting that the bull market might be far from over.

Yesterday, the Zweig Breadth Thrust (ZBT) flashed a bullish signal—a rare but powerful indicator. This metric, which measures momentum shifts in the NYSE, 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 marks pivotal support levels. Notably, the rally began near the year’s low on January 13, reinforcing the idea that the market may have found its footing.

Key Support and Resistance Levels in Focus

The continues to hold key support near the 583-592 level on SPY, highlighted by bullish TRIN closes. Meanwhile, gaps on the chart—marked in pink—could be retested, offering potential entry points for traders. Today’s push to a new short-term high above early December’s peak, alongside a higher low, introduces a bearish divergence. Historically, when the SPY hits its outer Bollinger Bands, a reversal often follows, which could set up the next major buying opportunity.

Seasonal trends suggest the next robust setup may emerge later this week or early next week, so staying alert to these levels is critical.

GDX (NYSE:): Short-Term Trend Points Up

Turning to gold miners, GDX continues to show strength. Both the 18-day averages of up/down volume percent and advance/decline percent are comfortably above -10, indicating the short-term trend is bullish. Interestingly, both indicators recently broke above their previous highs, yet GDX itself remains below its prior peak. This divergence suggests that GDX could soon challenge and surpass its recent highs, offering potential upside for traders.

Bottom Line

Key technical signals, including the ZBT and bullish GDX indicators, reinforce the case for a bullish outlook as we move deeper into 2025. While short-term pullbacks and gap-filling are likely, the broader trends point to strength ahead. Traders should watch for opportunities at support levels or during seasonal setups to position themselves for the next leg higher.