\ud83d\udce2For today\u2019s update, I\u2019m trying out a new report format. If you\u2019re anything like me, you love the insights that charts and other visuals can\u00a0deliver.<\/p>\n
So today, I want to highlight several key charts I\u2019m watching for the economy and capital markets.<\/strong> I\u2019ll provide a short writeup on each chart, and how it\u2019s impacting the near-term outlook<\/strong> or trading opportunities in the\u00a0making.<\/p>\n After that, you can find a bonus trade idea on a chart setup<\/strong> that I\u2019m monitoring along with a trading\u00a0plan.<\/p>\n Last week featured an updated look at the Personal Consumption Expenditures (PCE) inflation report. The Fed\u2019s preferred inflation gauge is inflecting higher similar to other measures of inflation<\/strong>, and has accelerated for three months in a row. The year-over-year rate of change in the headline figure (orange line) and core measure (blue line) that strips out food and energy prices has been moving higher since September and remains above the Fed\u2019s 2% inflation target<\/strong> as you can see\u00a0below.<\/p>\n Sectors and asset classes sensitive to rising inflation are potentially setting up major breakouts<\/strong>. The chart below shows the iShares S&P GSCI Commodity-Indexed Trust ETF (GSG). After recently testing the high-end of a range stretching back over two years, momentum became extended and GSG is pulling back. But note the 50-day moving average (MA\u200a\u2014\u200ablack line) is crossing above the 200-day (green line), while the MACD is seeing a bullish reset above the zero line<\/strong>. The small retracement off a key resistance level could setup a major breakout over the $23\u00a0level<\/strong>.<\/p>\n Another commodity sensitive to inflation is building on a major breakout that started at the end of 2023. Gold prices peaked just over the $2,000 per ounce level in 2020, and tested that level on three occasions before breaking out in December 2023. After a three month consolidation, gold prices are now hitting a new record high at over $2,800 per ounce<\/strong>. But another major breakout could be in the making. Adjusted for the money supply, gold prices are still about 80% below the peak<\/strong>. But that ratio is testing trendline resistance that goes back over 40 years<\/strong> in the chart\u00a0below.<\/p>\n Chart from Tavi Costa<\/a> on\u00a0X<\/p>\n A commodity chart could be sending an important signal about the state of the global economy<\/strong>. The chart below shows the Invesco DB Base Metals Fund (DBB). The fund holds an approximate equal weight across copper, zinc, and aluminum futures. Those metals are utilized in a variety of industrial and construction end markets, which makes their prices sensitive to economic developments<\/strong>. You can see that DBB is creating a symmetrical triangle pattern since peaking last May. Triangles are typically continuation patterns, which means they resolve in the direction preceding the pattern<\/strong>. You would expect a breakout higher in this case, which could target the prior highs near\u00a0$24.<\/p>\n Despite the recent uptick in market volatility, high yield bonds are also sending a positive message about the economic outlook<\/strong>. Total return indexes are hitting fresh all-time highs ahead of the stock market indexes. High yield spreads are also hovering near historic lows. Spreads represent the level of additional compensation investors demand over a safer security like Treasury bonds<\/strong>. When that spread widens, it shows investors becoming more concerned about the economic outlook by demanding more compensation to lend to risky companies. But low spreads reflect a positive outlook, with spreads currently hovering near historic lows <\/strong>in the chart\u00a0below.<\/p>\n Better performance in the average stock during January is triggering a breadth thrust on the S&P 500<\/strong>. The chart below looks at a ratio of the 10-day cumulative sum of advancing stocks relative to declining issues. That ratio jumped above 2 at the end of January, which triggered the thrust signal. When triggered, the S&P 500 historically experiences a rally over the next two months 90% of the time<\/strong>, while the equal-weight version of the S&P typically outperforms as\u00a0well.<\/p>\n Despite volatility around AI stocks and tariff headlines during the final week of January, the month still finished with a gain of 2.7%. During previous years where January experienced a 2% or higher gain, the calendar year finished higher 88% of the time with a median gain of 19.3%<\/strong>. The gains also bode well for the January barometer, which refers to the historical tendency for the S&P\u2019s calendar year performance to directionally match January\u2019s returns<\/strong>. The chart below plots the S&P 500\u2019s path since 1950 based on January\u2019s performance and if the month finishes higher or\u00a0lower.<\/p>\n Chart from Ryan Detrick<\/a> on\u00a0X<\/p>\n If the S&P 500 is going to follow through on the historical implications of a strong January, it\u2019ll have to contend with a poor incoming period of seasonality first<\/strong>. Going back to 1945, February is one of the worst calendar months for S&P 500 average returns<\/strong>. It has a slight negative return since 1928, and is the second worst month of the year after September. But historically, February is a tale of two halves<\/strong>. The first half tends to be bullish with rising price levels, which are then given back during the second\u00a0half.<\/p>\n The Traders Hub features live trade alerts, market update videos, and other educational content for\u00a0members<\/strong>.<\/p>\n Here\u2019s a quick recap of recent alerts, market updates, and educational posts:<\/p>\n The key level to watch on the Mag 7\u00a0ETF.<\/strong>There\u2019s more to the AI stock volatility than DeepSeek.<\/strong>My rule for evaluating price action after a plunge at the\u00a0open.<\/strong>A trade idea to take advantage of the $500 billion Stargate AI\u00a0venture.<\/strong><\/p>\n SharkNinja (SN)<\/strong><\/p>\n Creating a new basing pattern since October with a resistance level around $110. Recently coming up to test that level again, but with the MACD showing momentum is extended. I would like to see one more smaller pullback that resets the MACD above the zero line before breaking\u00a0out.<\/p>\n Earnings Releases<\/em><\/p>\n Economic Reports<\/em><\/p>\n Table from\u00a0FXStreet<\/p>\n I hope you\u2019ve enjoyed The Market Mosaic, and please share this report with your family, friends, coworkers\u2026or anyone that would benefit from an objective look at the stock\u00a0market.<\/p>\n Become a member of the Traders Hub<\/strong> to unlock access\u00a0to:<\/p>\n \u2705Model Portfolio<\/strong><\/p>\n \u2705Members Only\u00a0Chat<\/strong><\/p>\n \u2705Trade Ideas & Live\u00a0Alerts<\/strong><\/p>\n \u2705Mosaic Vision Market Updates +\u00a0More<\/strong><\/p>\n Our model portfolio is built using a \u201ccore and explore\u201d approach, including a Stock Trading Portfolio and ETF Investment Portfolio.<\/p>\n \ud83d\udea8You can start a 7-day free trial to the Hub by clicking <\/strong>here<\/strong><\/a>. By starting a trial, you will unlock all content and reports created exclusively for\u00a0members.<\/p>\n Disclaimer: these are not recommendations and just my thoughts and opinions\u2026do your own due diligence! I may hold a position in the securities mentioned in this\u00a0report.<\/em><\/p>\n Chart Report: Commodities setting up key breakouts.<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" \ud83d\udce2For today\u2019s update, I\u2019m trying out a new report format. If you\u2019re anything like me, you love the insights that charts and other visuals can\u00a0deliver. So today, I want to highlight several key charts I\u2019m watching for the economy and capital markets. I\u2019ll provide a short writeup on each chart, and how it\u2019s impacting the […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-41957","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/41957"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=41957"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/41957\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The Chart\u00a0Report<\/h3>\n
Heard in the\u00a0Hub<\/h3>\n
Trade Idea<\/h3>\n
Key Upcoming\u00a0Data<\/h3>\n