Mosaic Chart Alerts

S&P 500: Looking past headline volatility.

In this post, I’ll focus on setups that I’m monitoring for both long and short positions. With a chart and short write-up, this is a quick way to scan and plan potential trades.

These ideas are the end result of my process to identify stocks offering the right combination of growth fundamentals along with a proper chart setup.

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Stock Market Update

Last week brought DeepSeek and a flash crash in some of the world’s largest companies linked to the artificial intelligence (AI) buildout. This week started with tariff headlines impacting nearly $1.3 trillion worth of goods that could stoke inflation along the way. Following a dramatic selloff to start, the past two weeks have seen subsequent price action fill the opening downside gaps on the S&P 500 Index. The result is that while it feels like an incredibly volatile environment, the S&P is only 1% away from its high in the chart below. The S&P broke higher from a descending triangle after filling the post election gap. Despite the recent volatility, price is now making a bull flag pattern (shown with the green channel) just below the highs.

A weak open and strong close are hallmarks of a bull market. The other thing to keep in mind is that stock prices follow earnings over the long run. That makes a key piece of economic data that got lost among the tariff headlines very encouraging. The ISM Manufacturing PMI is a diffusion index built from a survey of purchasing managers. It’s constructed so that a reading above 50 indicates expansion in the manufacturing sector, and below 50 points to contraction.

For the month of January, the manufacturing figure climbed above 50 for the first time since October 2022. But it’s the underlying components of the report that are even more encouraging. New orders are considered a leading indicator of activity, and jumped three points to 55.1 during the month. At the same time customer inventories are running below 50. The dark blue line in the chart below shows a ratio of new orders to inventories, which can be a useful gauge of forward economic activity and often leads the headline ISM figure.

Despite the volatility, major indexes are holding near the highs while economic reports continue to suggest a strong economic backdrop supporting the earnings picture. Other commodity asset classes are on the move as well (i.e. see today’s trade alert), which are sensitive to economic activity. Keep reading below to see:

• Open ETF positions.

• Open stock positions.

• Chart analysis for new trade ideas.