Mosaic Chart Alerts

S&P 500: A historic reversal higher.

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

Following a 90-day pause on most reciprocal tariffs, the stock market staged a historic rally. The S&P 500’s 9.5% gain ranks as the third largest single-day increase going back to 1950. The Nasdaq had its second best day ever with an increase of 12%. The rally also saw the largest ratio of advancing stocks to decliners since at least 2011. The NYSE advance/decline ratio surged to 38 to 1 as you can see in the chart below. That breadth thrust means there were 38 advancing stocks for each declining stock on Wednesday’s rally. The massive reversal after testing the lows from Monday also highlights the binary nature of tariff policy and trade wars, and its impact on the economy and stock market. It’s worth noting that the 10% across the board tariff will remain in place, while tariffs Chinese imports are now increasing to 125%.

As I detailed in my weekend report, extremely oversold breadth levels, bearish investor surveys and positioning, and positive seasonal trends were the kindling to spark a massive reversal in the stock market. While this relief rally may have further to run, the longer-term recovery will still come down to the economic outlook and if the earnings picture remains intact. That means escaping the recession scenario if the the magnitude and duration of the stock market decline will be shorter-lived. The chart below shows the S&P 500’s past bear market drawdowns sorted by depth and duration. The orange dots are when bear markets are driven by recession, which tend to be more drawn out across time and have lower drawdowns.

My trading plan remains the same. Steep selloffs will reveal favorite institutional stocks, as those will be the names still trading in close proximity to their prior highs. I’m targeting stocks experiencing shallow retracements that are seeing their earnings outlook hold up against the broader market volatility. Keep reading to see:

• Open ETF positions.

• Open stock positions.

• Chart analysis for new trade ideas.