A Technical Analysis of the Markets
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In this episode of Barron's Live, host Lauren Rublin is joined by Katie Stockton of Fairlead Strategies and Barron's Editor-in-Chief Ben Levison for a deep dive into technical analysis of the markets. The discussion centers on the S&P 500's recent 4% year-to-date decline, driven by geopolitical tensions in the Middle East and rising oil prices, despite strong earnings expectations. Stockton explains how technical indicators—such as momentum gauges, overbought/oversold metrics, and relative strength—reveal a market in a corrective phase with signs of stabilization, particularly in the short term. She highlights the outperformance of equal-weight indices like RSP over the cap-weighted S&P 500, driven by rotation into small- and mid-cap stocks and non-tech sectors. The conversation expands to other assets: gold shows signs of trend exhaustion after a parabolic rise, crude oil has surged on a confirmed countertrend breakout, and bond yields are testing a key resistance level around 4.75%. Stock-specific analysis covers Levi’s, Delta Airlines, and Constellation Brands, with technical setups suggesting potential rebounds or consolidation. The episode also touches on international markets, where value-oriented regions like Europe and Japan are gaining relative strength, and explores the role of AI in technical analysis and the utility of ETFs like Fairlead Tactical Sector (TAC) for sector rotation and risk management.
The S&P 500 is in a corrective phase but showing signs of short-term stabilization after a steep drop, with support near 6,175 based on Fibonacci and prior peak levels.
Equal-weight indices like RSP are outperforming the cap-weighted S&P 500, signaling a rotation away from mega-cap tech stocks and toward small- and mid-cap and non-tech sectors.
Gold has shown signs of trend exhaustion after a parabolic rise, suggesting a shift to choppy, sideways price action rather than continued momentum.
Crude oil has confirmed a long-term bullish breakout on the monthly MACD, with prices up 65% since the Iran conflict began, but elevated levels pose risks to inflation and markets.
The 10-year Treasury yield is testing a key resistance at 4.75%, with a neutral long-term range still intact, suggesting caution before major repositioning.
…and 3 more takeaways available in PodZeus
Introduction to Technical Analysis and Market Context
Lauren Rublin introduces the episode and guests, setting the stage with the current market backdrop: a 4% year-to-date decline in the S&P 500 despite strong earnings expectations, driven by geopolitical tensions and rising oil prices. Katie Stockton explains the core principles of technical analysis—price trends, supply and demand, and market sentiment—and outlines the three main categories of technical indicators used in her methodology.
S&P 500 Correction and the Role of Momentum Indicators
“We had a long-term momentum gauge that we track, called the monthly MACD indicator... that flashed a sell signal last month and we did see a sell signal around this time last year. That was just a brief correction, though. This time there are some indications that it could be a bit more prolonged.”
Equal-Weight vs. Cap-Weighted Indices and Sector Rotation
“The equal weight has really had its moment to shine in this environment... it does appear to be somewhat meaningful in my work. You know, we saw the ratio get above the 200 day moving average and seems to be turning up here.”
Gold, Oil, and Bond Yield Technicals
“The steep up move... has definitely hiccuped here. We have now more volatility week over week, month over month. And when you see that it tends to reflect a tiring uptrend, especially one that's so steep.”
Stock-Specific Technical Analysis and Earnings Outlook
The team analyzes three stocks: Levi’s, Delta Airlines, and Constellation Brands. Levi’s shows a potential breakout from a long-term triangle pattern, with key levels at $18.50 (support) and $21 (resistance). Delta Airlines has strong long-term momentum but shows signs of trend exhaustion. Constellation Brands is showing improving long-term momentum and could benefit from a sector rotation into consumer staples, despite weak fundamentals.
“We had a long-term momentum gauge that we track, called the monthly MACD indicator... that flashed a sell signal last month and we did see a sell signal around this time last year. That was just a brief correction, though. This time there are some indications that it could be a bit more prolonged.”
“Technical analysis is one of the best disciplines for understanding cryptocurrencies as a trade or as an investment because it's a read on the supply demand.”
“The steep up move... has definitely hiccuped here. We have now more volatility week over week, month over month. And when you see that it tends to reflect a tiring uptrend, especially one that's so steep.”
Host
Guests
S&P 500
other
Katie Stockton
person
Crude Oil
other
Fairlead Strategies
organization
S&P 500 Equal Weight
other
10-Year Treasury Yield
other
Gold
other
Levi Strauss
organization
Ben Levison
person
Delta Airlines
organization
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