Taking the analysis further
If you want to go deeper than the weekly charts — including how the levels translate into actual trade planning and risk management — you can follow the work Brian Shannon and I do at Alphatrends.
That’s where we walk through the same market structure in real time and apply the process to actual trade setups.
Learn More at Alphatrends.net
Weakness Continues as Markets Test Key Support
Over the past several weeks we’ve been pointing out cracks developing beneath the surface of the market. Last week those cracks widened as major indices began breaking below important intermediate trend levels.
This week we saw continued downside pressure, with the S&P 500 testing its 200-day moving average, QQQ approaching long-term trend support, and several breadth indicators confirSummary
The market continues to resolve lower following several weeks of deterioration beneath the surface.
We now have five consecutive weeks of selling in the S&P 500, with repeated closes near the lows and little to no meaningful countertrend bounce. This is not panic or capitulation—rather, it reflects steady, controlled distribution as participants reduce exposure.
What had been a transition phase is now leaning clearly in favor of continued weakness. Participation remains limited, breadth is not yet washed out, and there is still no evidence of demand stepping in with authority.
Until price can reclaim key levels and establish alignment across timeframes, the path of least resistance remains lower. There is no urgency on the long side, and patience continues to be the most important tool.
Weekly Breakdown
Market Environment
Five consecutive weeks of selling in the S&P 500
Repeated closes near weekly lows
No meaningful countertrend rallies
Persistent, orderly selling—not panic or capitulation
Trend & Structure
Price below declining short-term moving averages
Continued sequence of lower highs and lower lows
Failed bounce attempts and weak upside follow-through
Trend remains lower across multiple timeframes
Participation & Breadth
Limited improvement in participation
% of stocks above 50-day stabilizing slightly, but still weak
% above 200-day continues to decline
Not yet at historically washed-out levels
Volatility & Character
Volatility rising gradually—not a sharp spike
Confirms controlled, systematic selling rather than emotional liquidation
Intermarket Observations
Small caps showing relative resilience but still fragile
Bitcoin remains weak below key levels
Bonds under pressure alongside equities
Commodities (especially energy-heavy) remain strong
Dollar consolidating without clear resolution
Sector & Leadership Notes
Former leaders (semis, software, MAG-7) showing increased selling pressure
Defensive positioning remains evident (staples, utilities)
High beta vs low volatility continues to favor defensive posture
Key Takeaways
This is controlled distribution, not panic
The absence of a meaningful bounce suggests buyers are not stepping in
The prior “transition phase” is resolving lower
Breadth is weak but not yet washed out
Leadership continues to deteriorate
What Would Change the Story
Reclaim and hold above key resistance levels
Sustained move above anchored VWAP levels
A rising 5-day moving average with follow-through
Improvement in breadth and participation
Until then, the burden of proof remains on buyers.
Bottom Line
This remains a market environment that favors patience and disciplined risk management.
There is no urgency on the long side, and while short setups can be difficult in extended conditions, the primary trend continues to lean lower.
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.trading-adventures.com/subscribe
