Everyone’s Watching the S&P—They’re Looking in the Wrong Place

The $SPX is setting up for a bounce—but the real money isn’t there. Liquidity is shifting, metals are breaking out, and international stocks are leading. Trade what’s moving, not what’s comfortable.

Markets are pulling back today, and everyone’s asking the same question: Is this just a shakeout, or the start of something bigger?

Most people guess. I don’t. I use a checklist. Because making decisions in volatile markets without a system is like flying a plane blindfolded.

✅ Relative trend structure: Are we still in an uptrend or above key support?
✅ Market internals: Is breadth holding up or breaking down?
✅ Liquidity flows: What’s happening with the dollar, bonds, and global risk appetite?
✅ Sector leadership: Are defensives taking control, or is risk still in play?

Right now, I’m watching these signals closely—because the best trades happen before they become obvious.

Where’s the Money Flowing?

Always the first question.

The equal weight S&P vs. market cap S&P ($SPX) tells you all you need to know. For a full year, the top 10 stocks carried the entire index while most other sectors lagged besides technology. That ratio bottomed in July 2024 and has been making higher lows ever since. That’s strength under the surface.

Meanwhile, the SPX is chopping sideways in a normal consolidation pattern and looks like it is ready to bounce off of the 40 week moving average.