2025 Started With a 'Triple Yellow' Power Gauge Signal
Folks, it might feel like things aren't off to the best start this year... The S&P 500 Index kicked off its first trading day of 2025 with a decline. Stocks clawed back gains on Friday.
2025 Started With a 'Triple Yellow' Power Gauge Signal
By Vic Lederman, editorial director, Chaikin Analytics
Folks, it might feel like things aren't off to the best start this year...
The S&P 500 Index kicked off its first trading day of 2025 with a decline. Stocks clawed back gains on Friday. But the last few trading days of 2024 saw the market fall nearly 2%.
After their big run higher into December, it looks like stocks are taking a bit of a breather.
But there's more than just that...
I'm sure you saw the tragic news about the New Year's violence.
In New Orleans, a man intentionally drove a rented truck into a celebrating crowd. Fifteen people died in that incident – including the attacker. And many more people were hurt.
And in Las Vegas, someone parked a rented Tesla Cybertruck in front of the Trump International Hotel. Then, the vehicle exploded. The driver died. And the explosion injured seven bystanders.
Police are still piecing together all the details. But there's no question that Americans are feeling uneasy right now.
With all of this uncertainty, it might not surprise you to know that the Power Gauge is cautious, too. In fact, our system has flashed a "triple yellow" signal.
Today, let's take a closer look at what that means – and why it matters for stocks in 2025...
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Now, regular readers know that Marc Chaikin and I both expect to see a lot of opportunity with stocks in 2025. But as the year starts, the "triple yellow" warning is something we need to take seriously.
Specifically, three major index exchange-traded funds ("ETFs") kicked off 2025 in "neutral" territory in the Power Gauge. And you can probably guess what they are...
The first "yellow warning" was on the SPDR S&P 500 Fund (SPY). Millions of investors track the performance of this broad-market ETF.
We also saw a "yellow warning" on the Invesco QQQ Trust (QQQ). As regular readers know, this ETF tracks the Nasdaq 100. And it's often described as "tech heavy" when compared with the S&P 500.
Lastly, the iShares Russell 2000 Fund (IWM) also received a "yellow warning" from the Power Gauge. This ETF tracks the small-cap Russell 2000 Index. That means it tracks the performance of smaller U.S.-listed equities.
And when we look deeper, combining the three ETFs, 654 of their holdings are rated "bearish" or worse right now. And 469 stocks currently earn a "bullish" or "very bullish" rating.
In other words, today you're more likely to pick a stock in "bearish" territory than one in "bullish" territory. Or more simply, you can't just "throw a dart" and hope to win in this market right now.
This should get your attention. It will take some effort to sort out the winners from the losers.
Of course, there's still plenty of opportunity out there. As I said, the Power Gauge has identified 469 "bullish" or better stocks within those three ETFs.
Here at Chaikin Analytics, it's our job to act on those opportunities... find the ones that best fit our strategies... and use the Power Gauge to help us get the timing right. As Marc said on Friday, we need to keep up with a changing market.
We can't just sit back and expect the market to hand out free money in 2025. The Power Gauge's "triple yellow" warning is clear...
This is a stock-picker's market right now.
Good investing,
Vic Lederman
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.79%
9
12
9
S&P 500
+1.22%
70
253
173
Nasdaq
+1.61%
20
54
26
Small Caps
+1.49%
379
1066
455
Bonds
-0.32%
Consumer Discretionary
+2.02%
14
29
7
— According to the Chaikin Power Bar, Large Cap stocks are more Bearish than Small Cap stocks. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Energy
+3.44%
Utilities
+1.31%
Real Estate
+0.74%
Health Care
+0.01%
Communication
-0.31%
Financial
-0.31%
Industrials
-0.41%
Information Technology
-0.74%
Staples
-1.22%
Discretionary
-1.68%
Materials
-2.04%
* * * *
Industry Focus
Biotech Services
16
84
39
Over the past 6 months, the Biotech subsector (XBI) has underperformed the S&P 500 by -5.65%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #11 of 21 subsectors and has moved down 4 slots over the past week.
Indicative Stocks
VERA
Vera Therapeutics, I
ALT
Altimmune, Inc.
ARWR
Arrowhead Pharmaceut
* * * *
Top Movers
Gainers
SMCI
+10.92%
VST
+8.49%
TSLA
+8.29%
PLTR
+6.25%
NRG
+6.2%
Losers
DLTR
-4.07%
TAP
-3.37%
CE
-3.35%
BBY
-2.96%
CCL
-2.52%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
No earnings reporting today.
Earnings Surprises
No significant Earnings Surprises in the Russell 3000.
* * * *
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This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.
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