Market Trends: Oil's Bullish Momentum, Gold's Volatility, and Tech's Resilience

1) OIL – Oil has maintained its bullish TREND now since it broke above $60 on JAN 21.  On TUES it tested that top end of trend ($62) and moved up pretty hard, now at $66.50.   Oil has some decent resistance at $68, but it certainly looks like the probabilities of higher oil prices might be here for a while.  Remember though too…a growing economy needs energy…especially this economy with the explosion of AI data center energy needs.

2) GOLD – Not too much has changed in price terms of Gold.  It still is signaling resistance at $5070 within an intermediate term bull market.  Gold Volatility (GVZ) is still really elevated at 33.74, and now in neutral territory.  If GVZ breaks above $36 and holds, volatility for gold would be moving into bullish (upward bias) territory…something that gold would not like.  What HAS changed is implied volatility for Gold (GLD) has moved to a -39% DISCOUNT, which points to complacency.  So, high and rising volatility along with investor complacency is NOT what bulls want to see.

3) TECH – The S&P 500 Large-Cap Technology Index is down about -2% this year and roughly -7% since late October.  On the surface, that sounds like deterioration.  But zoom out and you'll see something else. Tech is still trading in the same range it's been carving out since September.  That's not a breakdown. That's a pause.  And while headlines focus on what large-cap tech is not doing, the broader market continues to do something constructive.  The NYSE Advance-Decline Line just closed at an all-time high. The S&P 500 Advance-Decline Line is pressing toward one as well.  Again, that’s not what tops look like.  Right now, it's not "technology" that's struggling.  It's specifically large-cap technology.  The higher-probability outcome is that this relative weakness represents the lower end of a range, not the beginning of a structural breakdown.  If tech were truly rolling over, we'd expect to see cracks everywhere.  But that's not what's happening.  Semiconductors are hitting new all-time highs relative to the S&P 500. On an equally weighted basis, semiconductors are at all-time highs outright.  The market cap weighted S&P 500 is essentially flat so far this year, but the equally weighted tech index is already up 2.5% this year, and that’s near all-time highs.  Could large-cap tech still break down and change the tone of the entire market? Of course. We stay open-minded and simply follow the flows.  But right now, the evidence does not support a complete breakdown.  It points to digestion within an ongoing uptrend.  And here's the part that makes it even more interesting.  This morning, the latest data from the American Association of Individual Investors (AAII) showed more bears than bulls for the first time since Thanksgiving.  Stocks are near highs.  Breadth is at highs.  Leadership is expanding.  And individual investors are getting more bearish.  Those together do not spell “top”.