SPY in Leading Uptrend, but New Lows Expand – Two Signals to Watch

SPY in Leading Uptrend, but New Lows Expand – Two Signals to Watch

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SPY is within 3% of a 52-week high, but small-caps took a hit and new lows are expanding. This expansion, however, has yet to derail a bullish signal from May 2025. Today’s report will review this bullish signal and show the key levels to watch. We will also set bear market thresholds for SPY and new lows

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New Lows Expand, but have yet to Signal a Bear Market

The chart below shows SPY in the top window with the 5 and 200 day SMAs and S&P 500 New Highs/Lows. I made SPY thin and opaque to focus on the 5/200 cross. Smoothing the close with a 5-day SMA reduces the number of whipsaws without sacrificing signal integrity.

First, SPY remains in a long-term uptrend because the 5-day SMA is well above the 200-day SMA. In addition, SPY hit a new high just four weeks ago and is currently trading within 3% of this high. Small-caps may be taking a hit, but large-caps are doing just fine. Keep in mind that the Technology sector accounts for 37% of the S&P 500 and XLK is holding its recent breakout, which was featured on TrendInvestorPro.

The bottom window shows new highs and new lows as a positive/negative histogram. 52-week highs and lows are lagging indicators, but they provide insights on market leadership. Stocks hitting new highs are in leading uptrends, while stocks hitting new lows are in leading downtrends. Obviously, we want to see more leading uptrends than downtrends.

I have a blue line at 50 and a pink line at -50 for bull and bear market thresholds. With 500 stocks in the S&P 500, these thresholds mark the 10% level. Leadership is strong when new highs exceed 50, which first occurred on July 23rd, 2025. New lows have not been below -50 since early April 2025.

As far as bull and bear market signals are concerned, I would stay in bull market mode as long as the 5/200 cross for SPY is bullish and new lows have yet to exceed -50. In a strategic sense, a bearish 5/200 cross and expansion of new lows (>50) would signal a bear market.

S&P 500 High-Low Line is Still above Key EMA

The next chart adds the S&P 500 High-Low Line (middle line). This is a cumulative measure of net new highs (new highs less new lows). This line rises when new highs outnumber new lows and fall when new lows outpace new highs. The market has a bullish bias as long as new highs outnumber new lows. Breadth weakens when new lows increase and the High-Low Line turns down.

I added a 20-day EMA to define the upturns and downturns in the High-Low Line. There was a whipsaw in January 2025, a bearish cross in early April and a bullish signal on May 13th, 2025. This High-Low Line has been rising since May 2025, which marks a 16 month run and 30+ percent gain in SPY.

Currently, the High-Low Line is at 7779.60 and the 20-day EMA is at 7770.77, which means the High-Low Line is still rising. A cross below the 20-day EMA would show new lows outpacing new highs and this would be negative for stocks. In a tactical sense, such a cross could foreshadow a test of the 200-day SMA in SPY.

ETFs related to Tech, Semis and AI are leading since August with breakouts holding. We are monitoring these breakouts, as well as the steep rise in oil and interest rates.
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Using Breadth and BBands for Oversold Setups in the Semiconductor ETF (SMH)

The Semiconductor ETF fell pretty hard in July, but the decline was always viewed as a correction because it met the retracement requirements and formed a typical corrective pattern. Chartists looking for signals that a correction is ending can turn to Percent B and SMH %Above 50-day SMA. Both became oversold in July and one became oversold in early September. This means SMH is again setting up bullish as it corrects within a bigger uptrend. $SMH !GT40SMH

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Agribusiness ETF Defends Breakout with Strong Upturn after Throwback

Chartists missing a breakout can watch for a “throwback”, which offers a second chance to partake in the breakout. A throwback occurs when price breaks out, extends higher and then pulls back to the breakout zone, which turns first support. Price then turns back up and resumes its breakout. Today’s report will show a successful throwback and strong upturn in the Agribusiness ETF $MOO.

Agribusiness ETF Defends Breakout with Strong Upturn after Throwback Read More »

Breadth Improves as SPY Consolidates within Uptrend and becomes Oversold

Even though the momentum trade took a hit in July, broad market breadth continued to improve and the weight of the evidence remains bullish. The vast majority of stocks are in long-term uptrends, new highs are expanding and SPY is consolidating within an uptrend. There is clearly a bull market somewhere. $SPY $SPXA200R $SPXHLP

Breadth Improves as SPY Consolidates within Uptrend and becomes Oversold Read More »

Utes and Energy Show Strong Breadth – Utilities SPDR Extends after Bullish Signal

Long-term breadth captures the market mood here in July. Technology, Consumer Discretionary and Communication Services are lagging, while Energy, Utilities and Finance are leading. Despite relative weakness in three key groups, there is a bull market somewhere because some 65% of S&P 500 stocks are above their 200-day EMAs. Today’s report will rank sector breadth and show bullish signals for the Utilities SPDR. $XLE $XLU

Utes and Energy Show Strong Breadth – Utilities SPDR Extends after Bullish Signal Read More »

Agribusiness ETF Forms Outside Reversal and Surges off Bullish Setup Zone

The Agribusiness ETF is setting up bullish as affirms support with an outside reversal week and surges off a Bullish Setup Zone. Today’s report and video will explain the rationale behind these zones and show the key level to watch for a breakout. We will also look at performance for the top ten component stocks. $MOO

Agribusiness ETF Forms Outside Reversal and Surges off Bullish Setup Zone Read More »

Tech Weighs, but Other Groups Pick up the Slack – Biotech and Banks Lead

The technology sector is weighing on the S&P 500 as SPY corrects in June. Other sectors, however, are picking up the slack with industrials and healthcare moving higher. This June rotation is also benefitting the Regional Bank ETF and Biotech SPDR, which hit new highs. Today’s report will cover the recent rotations and show how the trade the trend in these two ETFs. $XLI $XLV $XLU $XLF $KRE $XBI $KBE $IBB $ITA

Tech Weighs, but Other Groups Pick up the Slack – Biotech and Banks Lead Read More »

Mixed Performance Weighs on the MAG7 as the ETF Hits Moment of Truth

The Mag7 ETF is slightly lagging the broader market because of relative weakness in three components. Nevertheless, four components are showing strength and the ETF hit a moment of truth as it returned to the breakout zone. Today’s report will focus on performance for stocks in the Mag7, the Mag7 ETF chart and one of the leading components (Apple). $MAGS $AAPL

Mixed Performance Weighs on the MAG7 as the ETF Hits Moment of Truth Read More »

Small-caps Lead – Breadth Improves as SPY Pulls Back – Industrials SPDR Sets Up

SPY pulled back in early June, but remains in bull market mode with improving breadth. The bull market is broadening with more stocks moving above their 200-day SMAs. This is especially true for small-caps, which were leading in March and continue to lead in June. Within the S&P 500, I am seeing a bullish setup in the Industrials SPDR. $SPY $IJR $SPXA200R $SMLA200R $XLK !GT200XLI

Small-caps Lead – Breadth Improves as SPY Pulls Back – Industrials SPDR Sets Up Read More »

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